Court Opinion

ID: 6229945
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:19:36.146811+00
Date Added: 2024-06-11T08:57:49.532593
License: Public Domain

Tbe opinion of tbe Court was delivered by
Black, J.
Tbe defendants below bought goods from tbe plaintiffs, valued at nearly $3000, and agreed in writing to pay for them by instalments, partly in cash and partly in “ good obligations.” Certain obligations were banded over against persons who afterwards turned out to be insolvent; but there was no guaranty, the paper being merely endorsed by one of tbe defendants with bis name. Subsequent to this, tbe plaintiffs brought a suit against tbe defendants for tbe balance due on tbe agreement, and got a judgment. The present action is to recover tbe amount which tbe plaintiffs lost by tbe insolvency of tbe persons against whom they took obligations from the defendants.
It is manifestly impossible for tbe plaintiffs to recover on tbe contract made with the defendants at the time tbe obligations were banded over; for there was no contract of guaranty. Tbe endorsement of an instrument, not negotiable by tbe person to whom it is payable, creates no obligation of that sort. Besides, this endorsement was made by only one of tbe defendants, and if two persons are sued, where only one is liable, tbe action is defeated as against both.
But this suit is brought on tbe original agreement of tbe defendants to pay in “good obligations.” It is alleged that tbe obligations banded over were not good, and that, therefore, there *312is no payment. But here the plaintiffs encounter the previous judgment on the same agreement, which is/a flat bar. The former suit was in assumpsit; the statement filed in it recited the contract in question, and claimed the sum of $2171 as being still due to the plaintiffs, and unpaid. Judgment went by default, and the amount due was ascertained regularly and entered of record. Of course this is conclusive of the amount then due on the contract, and if the plaintiffs recovered less than they were entitled to, they cannot retrieve the error by a new suit for the same matter.
The plaintiff’s counsel contend that the promise, when the goods were bought, to pay for them in good obligations was equivalent to a guaranty of the paper. We are not of that opinion. When a man parts with his property in consideration of a promise that he shall be paid for it in notes, obligations, or other evidences of debt against third persons, he is not bound to accept the paper of one whom he knows to be insolvent. And this is true, even where he has not expressly bargained for good paper. But when he receives notes or obligations in satisfaction and receipts for them, without demanding a guaranty, he takes the risk upon himself, unless he can show that they were fraudulently imposed upon him. When he has no express stipulation for a guaranty in his original contract, and when none was made at the time of the assignment, the assignor is clear, if he acted in good faith. The insertion of the word good implied no guaranty, but it gave the plaintiff a right to refuse notes which did not answer the description, though it was not necessary even for that purpose.
There are some details about this case which might require discussion if the errors had been regularly assigned. But they are all waived. We are satisfied that the cause was rightly tried in the Court below.
Judgment affirmed.