Court Opinion

ID: 3374283
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:17:31.348336+00
Date Added: 2024-06-11T12:07:42.101216
License: Public Domain

the question presented is "whether upon a letter of guaranty, addressed to a particular person, or to persons generally, for a future credit to be given to the party in whose favor the guaranty is drawn, notice is necessary to be given to the guarantor that the person giving the credit, has accepted or acted upon the guaranty, and given the credit upon the faith of it. We are all of opinion that it is necessary; and that this is not now an open question in this court after the decisions which have been made in Russel v. Clark, 7 Cranch 69,Edmonson v. Drake, 5 Peters 624, Douglass v. Reynolds,
7 Peters 113, Lee v. Dick, 10 Peters 482,and Reynolds et al., v. Douglass, 12 Peters 497. It is in itself a reasonable rule, enabling the guarantor to know the nature and extent of his liability; to exercise due vigilance in guarding himself against losses which might otherwise be unknown to him, and to avail himself of the appropriate means in law and equity, to compel the other parties to discharge him from future responsibility. If, therefore, the question were entirely new, we should not be disposed to hold a different doctrine, and the English decisions, we think, are in entire *Page 39 
conformity with our own." Adams et al., v. Jones, 12 Peters 213. To enable a party claiming under a guaranty, to recover from the guarantor by a letter of credit, he must prove that notice of its acceptance had been given in a reasonable time after the letter of credit had been accepted. The notice need not be proved to have been given in writing, or in any particular form, but may be inferred by the jury from facts and circumstances which shall warrant such inference.Reynolds et al. v. Douglass, 12 Peters 497.
These cases clearly show that the party tendering a guaranty for future and prospective credits is entitled to notice of its acceptance, and the party receiving it is bound to give it within a reasonable time after acceptance, or the party offering it will not be bound by it. But as there is nothing in the case stated, as we have before intimated, to warrant the court in drawing the inference, that John McClung in this case had notice of the acceptance of the guaranty, even if it had been intended for the house of David B. Taylor  Co., our opinion is against the right of the plaintiffs to recover on this as well as on the other point. Judgment must therefore be entered for the defendant.