Court Opinion

ID: 6576260
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:35.413003+00
Date Added: 2024-06-11T15:57:06.696526
License: Public Domain

The opinion of the court was delivered by
Bennett, J.
The language of this guaranty is, “I warrant this note good and collectible for two years from date,” and the case shows that it was given on or about the 11th of January, 1850.
It is claimed by the defendant’s counsel that this contract, by its very terms, implies a condition that the person taking it shall use all reasonable diligence to collect the note of the maker within a reasonable time after the note was passed from the defendant to the plaintiff, and that it must be fully tested whether the note was collectible or not within the two years.
That this guaranty is a conditional one, under the repeated decisions of this state as well as in other courts, can not be questioned ; and upon a general guaranty that a note is good or good and collectible, it is equally well settled that the means to collect it of the maker must be resorted to within a reasonable time. But the question is, what is the true construction of the guaranty now before us ? Is it a guaranty that the note should be good and collectible for a part of two years, or for the full term ? There can be no implication that the note is warranted good if collected *131within a reasonable time. Such an implied condition is at war with the language of the contract. It is warranted good and collectible for two years, and we think the obvious meaning of the parties was, that the note should be, and remain good and collectible for the full period of two years, and if it did not, there would be a breach of the contract. In Hammond v. Chamberlain, 26 Vt. 406, the language was, “I hereby guarantee this note good until the first day of January, 1850,” and in that case it was held that the obligation of the guarantor had relation to the solvency and ability of the makers of the note to pay it, and that the contract was that the makers, for the time limited, should be and remain in such a condition that payment could be enforced by the due use of legal process; and that the liability of the defendant only arose upon the inability of the makers of the note to pay it, and of the plaintiff’s inability to collect it. In that case the note was given to the guarantor in 1846, payable to his order on demand, and the guaranty was executed on the 12th of January, 1849.
The case of Wheeler v. Lewis, 11 Vt. 265, is much relied upon as being opposed to the views of the court now taken. That case must stand upon the ground that the plaintiff, having elected to commence his suit at a term of the court before the expiration of the time for which the note was warranted to be good and collectible, was bound to use proper diligence in the prosecution of his suit against the principal debtor. The court which tried that case charged the jury that the plaintiff was bound to prosecute the suit according to the ordinary course of collection suits, and the jury found, under the charge of the court, that the debt was lost for the want of such a prosecution of the suit, and this ruling was sanctioned by the supreme court. The case is one where the legal means adopted by the plaintiff to collect the note of the maker, proved abortive by reason of negligence in the use of such means.
In the case now before us the jury have found that within the two years, the principal debtor became wholly and utterly insolvent, and this at least, prima facie, is a sufficient excuse for an omission to attempt to collect the note of the maker. The law does not require the performance of an idle act.
*132In regard to the necessity of a demand for payment of the maker of the note, the same strictness is not required to charge a guarantor as would be necessary in order to charge a drawer or indorser of a bill or note in an action thereon, where, by the custom of merchants, a demand is necessary to charge other parties on the bill or note, notwithstanding the bankruptcy of the acceptor of the bill or maker of the note. The guarantor in this case, in effect, insures the solvency of his principal for a given time, and it is to be taken, at least prima facie, that it would be a nugatory ceremony to require a demand of payment to be made of a person entirely and hopelessly insolvent. If it could be shown in a case of this kind that the note would have been paid if demanded, notwithstanding the insolvency of the maker, it might require a different consideration. We deem it safe to say at least, that prima facie, a demand of payment of the maker of this note -was not necessary upon the facts found by the jury. See Warrington v. Furbor, 8 East. 242; Hitchcock v. Humphrey, 5 M. & G. 559; Walton v. Mascall, 13 M. & W. 453.
It is commonly laid down in the books that a man merely guaranteeing the payment of a bill or note, but not a party to it, is not discharged by the neglect of the holder to give him notice of the dishonor of it, unless he has been actually prejudiced by such neglect, and in the case of Murray v. King, 5 B. & Ald. 165, it was held that though a man indorse a bill, yet if he also give a bond for its payment, a want of due notice of its dishonor is no defense to an action on the bond. The defendant in this case is not sought to be charged as indorser of this note, but simply as a guarantor, and there are no previous indorsers upon it who are entitled to due notice of its dishonor in order to give a remedy against them. The law merchant does not extend to guaranties, and as the case shows the utter insolvency of the principal, there is no ground to claim the defendant has been damnified for the want of an earlier notice. It is not necessary to say what should be the rule as to notice if there had been previous indorsers upon the note, but we think this case, in this respect, stands the same as if the guaranty had been made by one not a party to the note. This case shows notice by the guarantor of the default of the principal before the suit was brought against him, and it may be reasonable to require *133this, even though the principal be utterly insolvent, that the guarantor may not be subjected to a suit and the payment of costs for the want of such notice. It has been frequently held that if the notice is not in time to enable the guarantor to save himself harmless the defendant must show it, and that in a case where the defendant could not have suffered for want of it, it is dispensed with.
As the counsel for the defense have not made a point of any other questions arising on the bill of exceptions, we shall treat them as severally waived.
The result is, the judgment of the county court is affirmed.