162 A. 454 | Pa. | 1932
Argued April 20, 1932. In the adjudication of the estate of Thomas J. Cancelmo, a claim was presented by the Citizens Bank *181 Trust Company of Tampa, Florida, on two promissory notes aggregating $35,000, payment of which it was alleged by the claimant has been guaranteed to it in writing by Cancelmo in his lifetime. The court below allowed the claim and this appeal follows.
The controverted question is the scope of the contract of guaranty, which admittedly the decedent, with others, signed. It reads, omitting the immaterial parts: "That for and in consideration of the sum of one dollar to each of us in hand paid by the Citizens Bank and Trust Company of Tampa, Florida, . . . . . . and in further consideration that loans and advances hereinafter referred to are being and are to be madeat our request, we, the undersigned stockholders and officers of the Growers Sales Company, Inc. . . . . . . do, jointly and severally, hereby guarantee to the said Citizens Bank and Trust Company the payment at maturity of any and all sums which the said Citizens Bank and Trust Company may lend or advance to the said Growers Sales Company or which the Growers Sales Company may in any way owe to the Citizens Bank and Trust Company by reason of indorsements, acceptances, over-drafts, drafts, or in any other way whatever, up to and not exceeding, the sum of . . . . . . $35,000.00. It being understood that this guarantee isa continuing guarantee covering all sums borrowed prior to May 31, 1927, and is to guarantee to the Citizens Bank and Trust Company the payment at maturity of any indebtedness which said Growers Sales Company may owe to said bank, but not to exceed at any time the said sum of $35,000.00." (The italics above and below are the writer's.)
The appellants advance three propositions to confute the decision of the court below: (1) That the undertaking of the decedent was a guaranty of borrowed sums "at maturity" without any provision authorizing renewal of notes, and as the bank surrendered the principal debtor's notes and accepted renewal notes without the knowledge or consent of the surety, the time of payment *182 was thereby extended and the surety was discharged. (2) That the guaranty contains no specific provision covering preëxisting debts and hence the surety was not liable for such a debt evidenced by a note not yet matured, which note the bank by arrangement with the principal debtor, and without the knowledge or consent of the surety, surrendered to the principal debtor, taking a new note so as to bring it within the guaranty. (3) That the bank having in its possession a note payable to the principal debtor, failed to collect it, and permitted it to be barred by the statute of limitations, and hence the estate of the decedent is entitled to credit for the amount of this note.
The main issue is the first one, that the guaranty covered only notes as they matured, not renewals. The auditing judge so concluded, but the court in banc determined otherwise. We are of opinion that the decision of the court in banc was correct.
If the words "at maturity" are alone looked at and emphasized, appellant's position is a very strong one. That, however, is not the way to view the undertaking of guaranty. All its language must be considered: Knickerbocker Trust Co. v. Ryan,
The guaranty is dated the blank day of August, 1926. Contemporaneously with or immediately subsequent to its execution, on August 18, 1926, the bank took from the corporation two notes at ninety days, one for $25,000 and the other for $10,000. The bank did not require payment of these notes on their due date, but, without notice to or knowledge of the decedent, surrendered them to the corporation and accepted renewals of them maturing February 14, 1927. The decedent died January 14, 1927. Following his death the notes were twice again renewed by notes which came due on June 14, 1927. It is these last notes upon which claim is made. *184
Appellants call to our attention the familiar principle last invoked by us in Yubas v. Makransky,
We now come to appellants' second position, that the guaranty contains no specific provision covering preëxisting debts and hence the surety was not liable for such *185 a debt evidenced by a note not yet matured, which note the bank, by arrangement with the principal debtor, and without the knowledge or consent of the surety, surrendered to the principal debtor, taking a new note so as to bring it within the guaranty. When account is taken of the fact that the note in question, together with the other note for $25,000 makes up the exact amount covered by the guaranty, the record would have to be clearer than it is in order to reach the conclusion that the $10,000 note was not covered by the contract. Again referring to its language, we see it says "loans are being and are to be made at our request." Certainly "are being made" may refer to existing loans. Further it says that the signers "guarantee the payment of any and all sums which [the corporation] may in any way owe to [the bank] up to the sum of $35,000.00. [This guarantee] is a continuing guarantee coveringall sums borrowed prior to May 31, 1927, [the note in question was given prior to that date] and is to guarantee the payment of any indebtedness which the company may owe to said bank" not exceeding the amount named. It cannot be convincingly argued that this language does not cover the obligation now in question. The auditing judge found that the $10,000 note was not a substituted one, but a new obligation for a new debt. We might well rest our conclusion on this finding, but have preferred to meet appellants' position as they have advanced it.
This brings us to the third and last question raised by appellants growing out of the facts that the appellee bank had in its possession a note for $2,500 payable to the Growers Sales Company and did not collect it, but, so it is alleged, permitted it to be barred by the statute of limitations. Appellants claim they are entitled to credit to the amount of this note. It was made by I. Cohen Sons, endorsed by the Growers Sales Company and delivered by it to the appellee as general collateral for the $35,000 loan. When delivered to appellee, it was overdue. The bank did not proceed at law for its collection, *186 because its information was that the makers were without resources and it was not willing to put up the money necessary for attorney fees and the expenses of suit. As we understand the situation, however, suit has now been begun by the appellants or some one acting in their behalf to collect it from the makers in Pittsburgh where they reside. There is no testimony upon which it can be found that any loss has resulted from the delay in bringing suit. Appellants took no action and requested none by the appellee for a considerable period after they knew of the note. Furthermore, it appears that the note was tendered by the bank to Edwards, another of the guarantors, for such action as he might desire to take. In addition to this, it is still unknown whether the note is barred by the statute of limitations, depending on whether it is an obligation covered by the law of Florida, where the limitation is five years, or of this State, where it is six.
The decree is affirmed at appellants' cost.