Court Opinion

ID: 8257456
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:33:17.543189+00
Date Added: 2024-06-11T16:43:02.914480
License: Public Domain

HáNDY, J.,
delivered the opinion of the court.
This action was brought by the defendants in error, upon the guaranty in writing, of the plaintiff in error.
The case was tried upon the amended declaration of the plaintiffs below; and the first ground of error here insisted upon, presents the question of the sufficiency of the declaration.
The declaration avers in substance, that the plaintiffs were iner-*446chants in New Orleans, in February, 1855, and that the defendant requested them to extend credit to, and accept the bills of, Chambers & Standley, a mercantile firm in this State, and furnish them goods and merchandise, and advance them money; and on the 5th February, 1855, that the defendant promised the plaintiff that he would execute his- guaranty to them, to secure the debt to be so contracted by Chambers & Standley; that, on the faith of the said promise, the plaintiffs accepted the bills of Chambers & Standley, and paid the same, dated in February and March,.1855; and on the 29th March, 1855, that they sold and delivered to Chambers & Standley goods and merchandise, the amounts of these several items and their dates being stated; and that, on the 23d March, 1855, the defendant, in consideration of his said promise and request, made his guaranty in writing, directed to the plaintiffs, whereby he undertook and promised the plaintiffs, to guarantee and be accountable to them for any balance of the debt aforesaid of Chambers & Standley, to the amount of three thousand dollars, which might remain unpaid by them; and that on the 31st August, 1855, at the close of the business season, and of their business with Chambers & Standley, they were indebted to the plaintiffs in the sum of $2258 26, the balance unpaid upon the debt contracted as aforesaid. It is further averred, that the plaintiffs received the said letter of guaranty about the 1st May, 1855, and accepted the same, of which the defendant had notice.
The second count is to the same effect, except that it does not aver notice of the acceptance of the guaranty to the defendant, and it avers that Chambers & Standley were insolvent on the 31st August, 1855, and have failed to pay the amount due the plaintiffs upon demand.
The objection now urged, in support of the demurrer, is, that the declaration does not show that the written guaranty was made upon a sufficient consideration to be binding in law; and in considering the objection, we must, of course, look alone to the aver-ments of the declaration, without regard to the evidence subsequently developed, upon the trial of the case before the jury.
The instrument sued on is not set out in hcec verba in the declaration, nor made part of it; and the averments as to its execution are, that on the 23d March, 1855, in consideration of his previous *447promise that be would execute bis guaranty to them to secure tbe debt wbicb Chambers & Standley contracted with tbe plaintiffs, and which they contracted on the faith of that promise, the defendant made his guaranty in writing of that date, directed to the plaintiffs, whereby he undertook and promised the plaintiffs to guarantee, and be accountable to them, for any balance of the debt so contracted, to the amount of $3000, &c. The objection appears to be, that no special consideration is averred for the execution of the guaranty, and that no consideration in writing for the same is shown; and, therefore, that the instrument is invalid under the Statute of Frauds.
If the instrument had been executed for a pre-existing debt, which was complete before its execution, and contracted without any reference to it, as a security which the defendant had agreed to give for the debt, and in consequence of which the debt was contracted by the original debtors, there would be force in the objection. But, according to the averments of the declaration, the original debt of Chambers & Standley was contracted with the plaintiffs, upon the defendant’s promise that he would secure it by his guaranty; and after it was contracted, he executed the guaranty sued on, in accordance with his original agreement. In such a case, it is clear, that the guaranty forms a part of the original contract between the creditor and the parties with whom he is dealing, and is supported by the consideration upon which the original indebtedness was founded. Where the guaranty, though collateral, is connected with, and the inducement to, the original credit, or the result of a previous promise, upon the faith of which the credit was obtained by the original debtors, the guaranty requires no new and independent consideration to give it force, but is part of the original transaction, and the consideration upon which the original credit was given. Hence such a case is not within the statute. Leonard v. Vredenburgh, 8 John. Rep. 29; 3 Kent’s Com. 123. And this appears to be the character of the case, as stated in the declaration. The demurrer was, therefore, properly overruled.
The next ground of error relied on, is the overruling of the motion for a new trial. This motion was based upon several grounds, which we will proceed to consider.
*448The first of these is, that the court erred in giving instructions to the jury.
The objection to the instructions appears to be, that the question whether the guaranty sued on was intended by the maker to cover the debt previously contracted by Chambers & Standley with the plaintiffs, was not sufficiently submitted to the jury, and that the instructions for the plaintiffs assumed that such was the intention of the defendant in giving the guaranty.
This view proceeds rather upon a literal and rigid construction of the instructions, than upon their spirit. Though the instructions complained of, are not as full as they might have been in this particular, it is evident from the whole of them, that the question whether the guaranty was made with reference to the original indebtedness, was sufficiently presented to the jury.
The next two grounds of the motion are, in effect, the same,— that the verdict is contrary to the evidence; and, in considering this, it is necessary to take into view the substance of the evidence, as it is presented by the bill of exceptions.
The principal witness in behalf of the plaintiffs was Benjamin F. Chambers, of the firm of Chambers & Standley, who testified in substance that, from misfortunes which befell that firm in the fall of the year 1854, it was without credit in New Orleans, and unable to carry on business, and that the witness informed the defendant, who was the father of Standley, one of the firm, that they would be compelled to stop business; that the defendant objected to their stopping business, and said he would furnish them the necessary credit; that witness went to New Orleans about the 1st February, 1855, with a view to obtain credit and make purchases, in order to continue the business of the firm, and just before he went_there that he saw the defendant in relation to his making a business arrangement for the firm, with some new commission house in that city, the house with which they had formerly done business having failed, and that the defendant said that he would give the firm credit in that city, and would guarantee the debt he might contract there, and that he sent him to procure credit on that basis. That he accordingly went to New Orleans, and contracted the debt upon which this suit is founded, the witness then informing the plaintiffs of what had passed between the witness and the defendant, pro-*449raising the plaintiffs if the credit was extended, that the debt should be promptly paid, and that it should be secured by the guaranty of the defendant, and that the defendant had promised to give the firm of Chambers & Standley an unlimited letter of credit; and on the faith of these assurances, that the plaintiffs gave the credit. That the reason why the witness did not take the guaranty with him, was that it was not then known, with what house the arrangement could be made. That when the credit was obtained, it was understood between the plaintiffs and witness, that the witness was to send them the defendant’s guaranty so soon as he got home. That in a few days after he returned home, about the last of February or first of March, the plaintiffs sent a blank letter of guaranty for the defendant to sign, and in a few days thereafter, that the witness went to the defendant’s house, and delivered him the letter of guaranty for his signature, informing him of the arrangement which witness had made with the plaintiffs, and of the credit which they had extended to his firm; and that the defendant expressed no unwillingness to sign the paper, but said as there was no ink in the house, that he would get some, and have it signed by the time witness returned. That witness called on his return, several days after, and that the defendant gave the same reason as before for not having signed it, but said he would go to his son James’s and sign it, and send it down in a few days. That some time thereafter, the guaranty sued on was sent by the defendant to the house of Chambers & Standley, and was received by his partner, Standley, while witness was from home; and some days after its receipt, that witness sent it to the plaintiffs at New Orleans, and witness never saw or heard of any letter accompanying it, stating that it was only a form, and was not intended to be binding on the defendant. He further stated that the defendant always, in speaking of his liabilities for Chambers & Standley, during the winter and spring of 1855, and before they stopped business, recognized the debt sued for as one of his liabilities.
On cross-examination, he stated that he never told James Stand-ley, Jr., that he had no letter of credit, and wanted none. That when he went to New Orleans, the firm of Chambers & Standley had no credit, and that the defendant had before given them credit with commission houses in New Orleans. That neither the defend*450ant nor James Standley, Jr., ever notified witness not to send the letter of credit sued on to tbe plaintiffs, and that be never told James Standley, Jr., that he had not sent it. He further stated, that the defendant did not tell him to call on the plaintifis, nor upon any particular house, for credit.
It was further proved, that on the 17th February, 1855, the plantiffs sent to Chambers & Standley a letter of guaranty, to be signed by the defendant, and returned to them, in the following form: — '
“ Messrs. Miles & Adams, New Orleans. Gent.: I hereby agree to guarantee the payment of all drafts drawn on your house by Messrs. Chambers & Standley, of Sidon, Miss.
“ Yr. obt. servt.”
And that the guaranty sued on was inclosed, by Chambers & Standley, in a letter to the plaintiffs, dated 28th April, 1855, and was received a few days thereafter, and is as follows:—
“ Black Hawk, March 23, ’55.
“ Messrs. Miles & Adams, New Orleans, La. Gent.: Your form of a letter of credit that you wished me to give Messrs. Chambers & Standley, at Sidon, is before me. I am not disposed to give my name, only on some specified amount, say for three thousand dollars. The above amount I will underwrite, for the house of Chambers & Standley, at Sidon.
“ Respectfully yours, Jambs StaNDlby.”
West, the clerk of the plaintiffs, testified that when the credit was given to Chambers, he gave a verbal promise that he would send to the plaintiffs the guaranty of the defendants so soon as he could return home.
On the part of the defendant, James Standley, Jr., testified, that he was at the defendant’s house some time in March, 1855, and that the defendant showed witness a letter of credit for an unlimited amount, sent to defendant by the plaintiffs for his signature, and which the defendant refused to sign; that defendant asked witness to draw up a form of guaranty for the sum of three thousand dollars, which witness did, and that the instrument here *451sued on was the one drawn up by him, and signed by him; that a few days thereafter, he learned that the same had been sent to Chambers & Standley, and fearing that witness might be made liable, he went to see Chambers &' Standley, and told Chambers that the instrument sent to them by the defendant was not signed by the defendant, but was drawn up by witness as a form, to see if it would answer his purpose, and that they must not send it to the plaintiffs; and that Chambers said he had not sent it, and would not send it; that it would not answer their purposes, but that he would send down all the cotton he could control; that on his way to see Chambers & Standley, he stopped at defendant’s house, and told him he was going to see Chambers & Standley, and that defendant did not then send any message in' relation to the guaranty, or request him to stop it from being sent; that Chambers stopped at witness’s house on his way to New Orleans, and that witness asked him if he had any letter of credit to any house, and he replied that he had not, nor did he want any; that defendant did not tell witness to tell Chambers & Standley not to send to the plaintiffs the letter here sued on.
The following letter was also in evidence, on the part of the defendant:—
“New Orleans, Sept. 26, 1855. Mess. Chambers & Standley, Sidon, Miss. Gent.: Inclosed you will find your account, showing a balance due on the 1st inst. of $2255 26. At the time your Mr. Chambers obtained our acceptances, he pledged his honor that they should be met by shipments of cotton, and that the father of your Mr. Standley would guarantee their payment. You will see that they have not been met by shipments of cotton, and Mr. Standley now denies his guaranty. Your Mr. Chambers, on the 28th April last, inclosed us a letter from Mr. J. Standley, saying that he would stand for $8000, a copy of which is herewith inclosed. On the *T7th July, Mr. J. Standley writes us, denying that he ever wrote such a letter. How is this ? We certainly expect this matter to be speedily arranged. Be good enough to let us hear from you, at your earliest convenience.
“Yery respectfully, Miles & Adams.”
*452The first position taken in behalf of the plaintiff in error, as showing the insufficiency of the evidence to support the verdict, is, that the instrument of guaranty sued on is plainly prospective in its terms, having no reference to any indebtedness already contracted by Chambers & Standley, and that it was not competent to show, by parol evidence, that it was intended to cover debts contracted before its date.
Whilst it is true, that the terms used in the guaranty would be fully applicable to indebtedness, subsequently to be contracted by the parties for whom it was given, it is also, without violence to its language and true spirit, susceptible of the construction that it was intended to embrace subsisting indebtedness. It makes reference to the letter of guaranty transmitted to the defendant by the plaintiffs for execution, which expressly covered drafts then drawn by Chambers & Standley on the plaintiffs, without specification of the amount, — expresses his unwillingness to give his name except for a specified amount, three thousand dollars, and concludes, — “ the above amount I will underwrite for the house of Chambers & Standley.” The only words used, showing a prospective intention, are the words, I will underwrite; and it is plain that they do not necessarily exclude an intention to become liable for indebtedness then subsisting, to the amount specified, but may well be taken to mean, 1 agree to underwrite, or I am willing to underwrite. And this appears to be the most natural construction of the instrument, under the circumstances. He was applied to, to execute a guaranty for all drafts drawn by Chambers & -Standley; he declines to give the guaranty except to the amount of $3000, and says, “ he will underwrite” for that amount. For that amount of -what? Certainly of the drafts drawn by Chambers & Standley. This is evident, when we take the guaranty sued on, in connection with the one which he was required to execute, and the circumstances attending the transaction.
If the language employed be uncertain or doubtful in its import, the true intention must be ascertained, by reference to facts and circumstances accompanying the execution of the instrument; and this may be done without a violation of any rule of law in relation to adding to or contradicting written instruments. Drummond v. Prestman, 12 Wheat. 515; Bell v. Bruen, 1 How. (U. S.) 169, *453186; Lee v. Dick et al. 10 Peters, 482, 493. It was certainly proper to consider tbe letter of guaranty which the party was required to sign, in order to understand general terms used in that which he executed instead of it. And by that evidence alone, the construction, that the guaranty sued on had reference to subsisting liabilities, is justified. But if we refer to the facts stated by the witness Chambers, which were submitted to be weighed by the jury, all room for doubt upon the point is removed.
This ground for the motion cannot, therefore, be maintained.
It is, however, insisted that the facts of the case show that the guaranty was prospective.
First. It is urged, that the fact, that the plaintiffs did not object to the guaranty when they received it, as it covered only a part of the debt due them by Chambers & Standley, amounting to about $3600, is irreconcilable with its being executed as security for the past indebtedness. But this conclusion would not be the only one to which these facts might lead. It would appear, according to the state of case relied on by the plaintiffs, that they had given credit to Chambers & Standley, on the faith of a parol promise of the defendant to guarantee the amount. That promise was not obligatory on him until reduced to writing; and when afterwards called upon to give his written obligation for the amount, he refused to do so, except for a specified amount. Under such circumstances, it would have been the height of folly in the plaintiffs to decline to accept his guaranty for the amount specified; for it was all the security they could get from him. This appears to be a sufficient reason for their acceptance of the guaranty, for an amount somewhat less than the indebtedness for which they claim that it should have been given.
Again. It is said to be strange and extraordinary, that the defendant did not give the letter of credit when Chambers went to New Orleans, if he intended to guarantee the payment of the debts contracted by him 'on that occasion. There is certainly force in this view; and it would appear to be unreasonable, if he intended to guarantee the debt then contracted, that he should authorize Chambers to state that he would guarantee the amount, instead of giving a letter of credit; and the difficulty is not entirely removed by the explanation that the house from w'hich the credit would be *454obtained was not known; for he might have given a general letter of credit to any house from which the credit might be obtained, as well as a general verbal promise to give a guaranty.
But this was a mere question of fact, to be determined by the jury from the probabilities of the matter, and from the positive evidence before them. However unusual the transaction might appear to be, if they gave credit to the testimony of the witness Chambers, they could not have avoided coming to the conclusion, that Chambers was authorized by the defendant to obtain the credit upon the faith that the defendant would guarantee the amount to the house from which it should be obtained. If they believed the witness, that'fact was sufficiently established; and it appears that, upon the question of his credibility being fully submitted to them, they found their verdict upon the view stated in his testimony. And it is beyond the province of this court, under such circumstances, to say that the jury did wrong in acting upon his testimony as true.
Another circumstance relied on to show that the guaranty was not understood to extend to the indebtedness here sued for, is the letter of the plaintiffs of 26th September, 1855, addressed to Chambers & Standley. That letter states that, when the credit was obtained, Chambers pledged his honor that it should be met with shipments of cotton. And hence it is argued, that the credit was given upon the pledge and responsibility of Chambers & Stand-ley, and not upon the promised guaranty of the defendant. But the letter continues to say, that the credit was obtained upon the pledge that the defendant would guarantee the amount. Both of the pledges are distinctly stated as inducements to the credit; and it does not impair the force of the latter, that the recipients of the credit pledged their honor that they wmuld discharge the debt by shipments of cotton. They were the parties primarily bound to pay it; and it was both the right and the duty of the plaintiffs to require them to do so, before resorting to the collateral obligation arising upon the guaranty.
Upon the whole, it is manifest, that the sufficiency of the evidence to sustain the verdict, depends upon the credit to be given to the testimony of Chambers. It was the province of the jury to decide that question; and it was fully submitted to them by the *455instructions, and tbe verdict was in favor of bis credibility. That question being settled, there can be no doubt but that his testimony fully established the liability of the defendant, and justified the verdict.
Several other errors have been assigned, but they do not appear to' be relied upon in argument as grounds of reversal.
Let the judgment be affirmed.