Court Opinion

ID: 6577319
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:26.185026+00
Date Added: 2024-06-11T15:57:08.858946
License: Public Domain

Ellsworth, J.
From the motion it appears, that on thé 8th day of August, 1854, Joseph Haight, the son of the defendant, purchased the plaintiff'’s interest in the company of Redfield and Haight, and the further interest of the plaintiff in the business which he had carried on alone for the two months preceding. The said Joseph was, by the contract under which the sale was made, to assume and pay all the outstanding debts of both Redfield and Haight, and of the plaintiff alone. In order to bring about the purchase, the said Joseph agreed to procure the defendant to guarantee the fulfillment of his contract, and this he did by obtaining her signature to an agreement endorsed at the time on the back of the contract of sale by'the plaintiff to the said Joseph, in the following words : “ In consideration of one dollar to me in hand paid, I hereby guarantee the full and fair performance *37of the covenants and agreements mentioned in the foregoing instrument on the part of Joseph Haight.”
No claim is made except for the non-payment of a debt of some $1,500 due in part from Redfield and Haight and in part from the plaintiff, to Nelson Sherwood, which is one of the debts specified in a schedule attached to the instrument of sale.
This debt the said Joseph and the defendant have neglected to pay, and the former is insolvent. The plaintiff has been sued for it and judgment recovered, and some part of the money has been paid by the plaintiff since suit brought.
The defendant objects to a recovery against her, upon said guaranty, on the ground that her contract is one for indemnity merely, and that when the action was commenced the plaintiff had not been damnified ; having at that time paid no money nor sustained any loss absolutely, nor in fact was there, as she claims, at that time any fixed and adjudged liability against said Joseph.
Very little has been said and little or nothing could be said on the latter part of this objection, viz., the want of a fixed and adjudged liability of said Joseph. The defendant’s contract is not one of indemnity, but an absolute guaranty, and was broken at once when said Joseph neglected to perform his contract; and it was not for him to say that he did not know of this debt and was not bound to assume it and pay it until after suit and judgment. He had engaged to do it within a reasonable time; and the defendant had engaged that it should be so done. That this is the character of the defendant’s undertaking is, we think, clear beyond all question, and equally so, whether we look at the point with reference to legal principles, or to authorities.
' An agreement in the words of the instrument in question is strictly a guaranty,—a contract that some particular thing shall be done just exactly as it is agreed to be done, whether it is to be done by one person or another, and whether there be a prior or principal contractor or not. And notice of the breach in such a case, where a third person is to do the act guarantied, generally need not be *38given before suit; because knowledge of the default is as open to the inquiry of the person who has given the guaranty, as to the one who is guarantied. So this court held in Hammond v. Gillmore’s Admr., 14 Conn., 480. Numerous cases are there cited to the same effect. That such is the nature of a guaranty is settled in Williams v. Granger, 4 Day, 444. Breed v. Hillhouse, 1 Conn., 524. Willey v. Leeds, id., 302. Craft v. Isham, 13 id., 34. Elton v. Johnson, 16 id., 253. Lathrop v. Atwood, 21 id., 124. Hammond v. Gilmore’s Admr., supra. Cooper v. Dedrick, 22 Barb., 516. Read v. Cutts, 7 Greenl., 192. Gates v. McKee, 3 Kern., 232. Tillman v. Wheeler, 17 Johns., 326. 2 Am. Lead. Cas., 93.
The defendant however, insists that her agreement is not a guaranty, but merely a contract to indemnify the plaintiff. If this be so, we do not deny the soundness of her conclusion. In such a case there must be absolute damage before bringing suit. But, as we have already said, she is mistaken in the character of her undertaking. Her principal covenanted that he would assume and did thereby assume the payment of the liabilities and debts of the firm of Redfield and Haight and the debts contracted by the plaintiff in the same business continued; and so in another part of the instrument, it is said that the said Joseph is to release and discharge the plaintiff from all liability for said debts. He has, it is conceded, left the debt due to Mr. Sherwood just as it was, unassumed and unpaid. The true and acknowledged distinction between a guaranty and a contract of indemnity is well laid down in Cutler v. Southern, 1 Saund., 116, that “ when a condition is to discharge or acquit the plaintiff from a bond or other particular thing, non damnificatus is not a good plea, but the defendant should set forth affirmatively the special matter of performance ; but if the condition be to acquit from damage merely, such a plea is good and effectual.”
The case of Port v. Jackson, 17 Johns., 239, is in point. There the court say: “ The covenant is not that the defendant shall indemnify the plaintiff against any damage he may sustain, but it is express and positive that the defendant will *39pay the rent.” So in Ex parte Negus, 7 Wend., 499, the court say: “ Whether an action lies or not, depends upon he true intent and meaning of the covenant; if it is simply to indemnify and nothing more, then damages must be shown before the plaintiff can recover, but if there is an affirmative covenant to do a certain act, or pay certain sums of money, then it is no defense in such an action to say the plaintiff has not been damnified. *,** Here Negus assumes the debts of the partnership; he makes them his own individual debts ; he is the person to pay them.” Where there is a positive agreement to do the act which is to prevent damage to the plaintiff, then action will lie if the defendant neglects or refuses to do such act. See Chace v. Hinman, 8 Wend., 452. Thomas v. Allen, 1 Hill, 145. Aberdeen v. Blackmar, 6 Hill, 324. Booth v. Starr, 1 Conn., 244.
But we need not go abroad for the law on this point. The doctrine is no where adjudged and commented upon better than in Lathrop v. Atwood, 21 Conn., 125. There the plaintiff sold out to his former partner and one Crouch all his interest in the old firm. The new firm took every thing that the former owned, and agreed to make and deliver to the plaintiff, in consideration of. the sale, a certain quantity of spectacles, from time to time, and to pay all the debts of the old firm and save the plaintiff harmless. The new company partially performed their contract and failed, leaving certain debts unpaid and undischarged. The court held that the plaintiff, having given the defendants a reasonable time for performance and they not having performed, had a good cause of action. The defendants insisted there as here that the promise was one for indemnity merely, and that as the plaintiff had sustained no absolute loss he ought not to recover, but the court thought otherwise, and in giving their opinion, they lay down this as the received doctrine: “ If a condition, covenant or promise be only to indemnify and save harmless a party from some consequence, no action can be maintained for the liability or exposure to loss, nor until actual damage susceptible of appreciation and estimate has been sustained by the plaintiff. But if the promise or covenant be to per*40form some act for the plaintiff’s benefit, as well as to indemnify and save harmless from the consequences of non-performance, the neglect to perform the act, being a breach of contract, will give an immediate right of action.” We consider that case to be decisive of this, and shall therefore dwell no longer upon the point, but proceed to consider the question of variance which the defendant makes in the case.
The third count upon which the plaintiff obtained his verdict, states the consideration of the defendant’s guaranty to be one dollar. The guaranty itself says the same thing. But it came out in proof in the progress of the case, that the actual consideration of the sale was the contract of the sale itself, upon the terms contained in the instrument of sale, and not the literal paying over and receiving of a dollar in money. This the defendant insists is a variance and fatal to this count. We consider this an incorrect view of the matter. Could not the parties agree, as a matter of convenience, to give the actual consideration an assumed value in money, and insert that sum as.the consideration in their contract ? In such a case there would be no variance. The cases are abundant, that an agreement between the parties that certain property shall be treated as and held to be cash in their traffic, confers upon it that character. In Gregory v. Mack, 3 Hill., 382, it is said, that when parties have agreed on a particular thing as a medium of payment, whether it be lands, goods, or labor, and the agreement has been carried into execution, it is the same thing in legal effect as though . the like sum had been paid in money.” A note of hand given for the value of land, goods, or labor is a familiar instance of money due which may be recovered under the money counts. In Hall v. Hukins, 41 Maine, 574, the court say that the plaintiff may recover on the money counts, if any thing has been received by the defendant as payment in lieu of money, as notes, chattels or real estate. The same is held in Willie v. Green, 2 N. Hamp., 333. Clark v. Penney, 6 Cow., 297. Arms v. Ashley, 4 Pick., 71. Hall v. Ives, 11 Conn., 470. Clark v. Fairchild, 22 Wend., 584. Way v. Wakefield, 7 Verm., 223, 228. Ainslie v. Wilson, 7 Cow., *41662. Hands v. Burton, 9 East., 349. 1 Selw. N. P., 104. Ames v. Le Rue, 2 McLean, 216.
There is another view still which brings us to the same conclusion on this point. We should, were it necessary, hold that the parties to a good and valid contract, having agreed to insert as the consideration a specific sum of money, whether one dollar or one hundred dollars, ought not in an action on the contract to be allowed to deny the fact or validity of such a consideration as is thus expressed; for it* was made to assume that form in order to bind the parties effectually, and after this it would be equally unjust and unprecedented to allow them to deny or rescind the agreement without mutual consent.
A further question has been made, whether the plaintifi is entitled to recover the costs to which he has been subjected in the two suits of Sherwood against, him. We think he is not. Most of these costs have accrued since the commencement of the present suit, and nothing is said about any costs at all in the plaintiff’s declaration. Nor is the contract of the defendant a guaranty against costs, but it is an absolute’undertaking, and when broken the plaintiff could at once have paid the debts and prevented the bringing of suits.
Our advice is that if the plaintiff will release these costs he shall retain the verdict for the balance, but that otherwise there would be a new trial.
In this opinion the other judges concurred.
New trial advised nisi.