Court Opinion

ID: 6997282
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:35:38.424304+00
Date Added: 2024-06-11T16:09:48.932041
License: Public Domain

Mr. Justice Harker delivered the opinion of the Court. This is an appeal from a judgment in favor of appellee; who was sued jointly with E. E. Clark upon a guaranty of payment indorsed upon four promissory notes by Clark for the firm of Clark & Newell. The suit was defended by Newell upon the ground that Clark made the indorsement without authority. Newell testified that the indorsement was not made until after the dissolution of the partnership. He is corroborated by John E. Decker, an attorney, who had the notes in his possession at the time and for a few days after the dissolution. Notwithstanding the denial of Clark, the court was justified in finding that he made the indorsement after the dissolution and without the knowledge or consent of Newell. It is insisted, however, that Clark had the authority to sign the firm name to the guaranty on the notes, after the dissolution of the partnership, for the reason that in so doing he was simply completing a contract which the firm had undertaken and which remained unfulfilled at the time of dissolution; such obligation, it is contended, appears from the 9th article of the agreement with Parker and Dennett under which the machines were consigned to the firm of Clark & Newell and sold to the makers of the notes. It reads: “ The party of the second part agrees to attend to the collection or securing of notes taken by him, without extra charge, when requested, and agrees to guarantee the collection and does hereby guarantee the collection of any and all notes taken by him which do not show a property statement in all respects as required in article 7.” It will be observed that the guaranty contained in this article is for the collection of certain notes, and not for the payment of them. A guaranty for the collection of a promissory note and a guaranty for the payment of it are distinct undertakings. A guaranty for the collection of a note simply obligates the guarantor to collect or pay if collection can not be made off the maker, and diligent prosecution of the maker by the usual remedies without effect, or showing his insolvency, is a condition precedent to a recovery against the guarantor. Newlan v. Harrington, 24 Ill. 207; Cumpston v. McNair, 1 Wendell, 475; Dyer v. Gibson, 16 Wis. 584. Clark was not authorized to make the indorsement after the dissolution. Judgment affirmed.