140 Misc. 394 | N.Y. Sup. Ct. | 1930
This action is brought to recover the sum of $34,500 and interest, alleged to be due the plaintiff under a guaranty alleged to have been executed and delivered by defendant’s testatrix to plaintiff on July 6, 1927, The guaranty reads as follows: " New York, 7/6, 1927. The Bank of United States, New York City,
The complaint alleges that, relying on said guaranty, plaintiff extended credit accommodations and loan to Edward Rowan, Inc., $34,500, evidenced by seven promissory notes, which plaintiff discounted for it. That upon the maturity of the notes, they were not paid and renewal notes were given on various dates between November 21, 1928, and January 16, 1929. Margaret J. Rowan died on March 19, 1928, which was before the last set of renewal notes was given to the plaintiff. Though the defendant claims that the evidence does not establish that the guaranty was signed by its testatrix, I find that it was so signed.
The guaranty on its face states that “ we hereby jointly and severally guarantee ” and “ we jointly and severally agree to pay,” and also that it is to continue “ until written notice from us to you.” By reason of these recitals, defendant contends that it was intended to be a joint and several obligation, and, as it never was signed by
It rests upon the person executing the instrument to establish that he was not bound by its provisions, and that the delivery was to be given in escrow, and not absolute. (Chouteau v. Suydam, 21 N. Y. 179.) Nothing is shown to warrant the conclusion that the testatrix indicated at the time of the delivery of the instrument that she did not intend to be bound unless other parties also signed. The original notes were not paid and discharged by the taking of the renewal notes. (Jagger Iron Co. v. Walker, 76 N. Y. 521; Garfield National Bank of City of New York v. Wallach, 223 App. Div. 303; Cohen v. Rossmoore, 225 id. 300; 8 C. J. p. 443, § 656, and cases cited.) The extension of time of payment did not release the guarantor. The instrument sued on is a continuing guaranty. It was given to plaintiff bank for the purpose of having it extend credit accommodations to its customer. It is broad in its scope, guaranteeing the payment of “ any liability of said borrower now or hereafter incurred, including any overdraft, promissory note, or amount authorized to be charged to the borrower, and all liabilities at any time incurred by said borrower to you.”
While no definite rule for the construction of contracts of guaranty can be extracted from the many decisions, each adjudication depending upon its own facts, the cardinal principle to be applied is to read the writing, and, taking its language in connection with the relative position and purpose of the parties, to gather from it their intent as to the questionable part. Here we have a continuing contract, practically unlimited in its scope, given to a bank for the purpose of having it extend credit accommodations to its customer. The rule seems to be that where a guaranty is given to a bank to secure advances on drafts and notes, the guaranty may be construed to apply to successive advances,
The court further (p. 348) recognized the general principle that a gift of time to a principal debtor discharges the surety, but limits the application of the rule to cases where “ new arrangements, not contemplated at the time of entering into the guaranties by any of the parties, are introduced; and thus the state of circumstances altered without the contemplation and without the consent of one of the parties.”
Here the wording of the guaranty and the circumstances under which it was given indicate that the guaranty was to apply to successive renewals of notes given by the borrower to the bank. Cases to this effect are Hartwell & Richards Co. v. Moss (22 R. I. 583; 48 Atl. 941); Burt & Snow v. Butterworth (19 R. I. 127; 32 Atl. 167), and City Nat. Bank of Poughkeepsie v. Phelps (86 N. Y. 484, 491).
Verdict directed for plaintiff for $34,500, with interest in the sum of $3,290.17. Execution to be stayed thirty days, and defendant to have sixty days to make and serve a case.