Court Opinion

ID: 6537274
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:12:46.85538+00
Date Added: 2024-06-11T15:55:41.989206
License: Public Domain

Lacy, Judge, delivered the opinion of the court: In inspecting the record in this case we find some difficulty in determining in what court the suit was originally commenced. There are several entries denominating the court as the County Court of Independence, and others showing it was the Probate Court of that county. It is clear that the first tribunal had no jurisdiction in the' premises, and it is equally manifest that the latter had. Taking the entries, however, separately and connectedly together, we think the record shows that the proceedings were had before the Probate Court. The writ of mandamus sued out was directed to the Judge of the Probate Court, and the judgment or allowance was entered up before the Probate Court. The only question to be decided is, as to the effect of the guarantee. It is contended on the part of the appellant, First, that it is void, because it does not show any consideration, as required by the statute of frauds; and secondly, that there was no proof of a demand on Randolph and Keefhley, of their refusal to paj, and of notice to the appellant. If the first question turned upon the principles of the common law, it might be somewhat questionable whether the guarantee contained sufficient consideration. But this is a guarantee executed in the city of New Orleans, and of course the civil law, the lex loci, fixes the appellant’s liability. This frees the case from all difficulty; for the civil law is express upon the point, and holds the guarantee to be good without proof of consideration. It goes upon the principle, that he who undertakes for another, shall be bound by his agreement; and that he cannot exonerate himself from his contract, by alleging that he received no consideration for its execution. According to the civil law the party who enters into an agreement voluntarily is bound by his stipulation, and he who accepted the guarantee looks to it for the ultimate fulfilment of the original undertaking. According to the Louisiana Code “ suretyship is an accessary promise by which a person binds himself for another already bound, and agrees with the creditor to satisfy the obligation, if the. debtor does not.” Louisiana Code, Art. 3004; Herries vs. Canfield, 9 Martin 385; Woods' Civil Law 227. Pothier says, “suretyship is a contract, by which a person obliges himself on behalf of a debtor to a creditor for the payment of the whole, or a part of what is due from such debtor, by way of accession to his obligation. The contract which intervenes between the security and the creditor is not an agreement of beneficence, for the creditor, by this contract, receives nothing more than is due him. He only procures a security for what is due him, without which he would not have contracted with the original debtor.” Pothier on Obl., part 2, ch. 6, p. 365. The obligation of the security towards the creditor is to pay him in case the debtor should not satisfy the debt, and the property of such debtor is to be previously discussed or seized, unless the security should previously have renounced the plea of discussion, or be bound in solido jointly with the debtor, in which case the effects of his engagement are to be regulated by the same principles which have been established for debtors in solido.” 11 L. R. 211, Union Bank vs. Forstall; 2 Greenleaf 341; 4 Greenleaf 72; 17 Serg. and Rawle 354; 8 Cow. 168. It is a stipulation to pay in case the original debtor does not, and it is an auxiliary obligation. The right which the security would have of referring the creditor to the discussion of the principal debtor, is a right in equity as well as in strict justice. The creditor ought not to be allowed to enforce the payment of the security without notice of the non-payment of the principal debtor. A debt should be paid rather by those who are the real debtors, and who have profited by the contract, than by those who are debtors for others; a security, or guarantee, being but an engagement collateral .to, and arising out of the original obligation. Poth. on Obl. 236, and 269; 12 East 227; 1 Domat C. L. 205; 1 Cranch 181; 3 Cranch 311; 1 Cond. R. 366; 1 Mason 368. In Douglass, and others, vs. Reynolds, and others, Peters 127, Judge Story uses this language: “ By the very terms of this guarantee, as well as by the general principles of law, the guarantors are only collaterally liable, upon the failure of the principal debtor, to pay the debt. A demand upon him, and failure on his part to perform his engagements, are indispensable to constitute a casus fcederisP The creditor is not bound to in- fj stilute any legal proceedings against the debtor, but he is required tof| use reasonable diligence to make demand, and to give notice of the || non-payment. The guarantors are not to be held to any length oftt/ indulgence of credit which the creditors may choose; but have a right to insist that the risk of their responsibility shall be fixed and terminated within a reasonable time after the debt has become due. The objection taken by the defendant below to the want of notice of non-payment by Randolph and Keethley, upon the bill for which Montgomery, Kelly & Co., became the guarantors, is, in our opinion fatal. The judgment of the Circuit Court must be reversed.