118 Misc. 480 | N.Y. Sup. Ct. | 1922
This is a motion by the defendant for judgment on the pleadings on the ground that the guaranty sued upon is a guaranty of collection and not one of payment, and that the complaint, failing to allege inability to collect from the principle debtor, is defective. Plaintiff's treasurer wrote to defendant’s vice-president as follows (the italics being mine):
« January 6> 1920.
" Mr. N. S. Reeder, Vice President,
" The Pressed Steel Car Company,
“ No. 24 Broad Street, New York, N. Y.:
" Dear Sir.— Our Assistant Treasurer, Mr. W. S. Swingle, had up with Mr. Kelly of. the American Steel Company of Cuba the question of guarantee from the Pressed Steel Car Company for such business as may be placed with us by the American Steel Company of Cuba. You will understand that we have been granting the American Steel Company of Cuba ninety days trade acceptance terms for some little time now, and everything has been eminently satisfactory, but the account is a growing one, and one that has practically reached the limit that we can give to any one concern without having either a guarantee of payment from a bank or from
« yery truly yours
“-, Treasurer."
Defendant replied:
“ No. 24 Broad Street,
“ New York City, Jan. 16, 1920.
“ Consolidated Steel Corporation
“ Attention Mr. Marc M. Michael, Treasurer,
“ No. 165 Broadway, New York City:
“ Dear Sir.— We have your letter of January 6th, in regard to the account of the American Steel Company of Cuba, and, as requested therein, this Company hereby guarantees to the Consolidated Steel Corporation the payment for such business as may be placed with it by the American Steel Company of Cuba.
“ Yours very truly,
(Signed) N. S. Reeder, Vice-President."
Defendant’s contention is expressed in its counsel’s brief as follows: “ The guaranty of payment of business yet to be placed by the principal debtor with the creditor is a pure guaranty, which imports solely a secondary liability, a promise to answer only for the debt of another, and not enforcible by action until the primary obligation of the principal debtor has been judicially ascertained by a judgment against the latter, and the extent of the default has been likewise ascertained by the issue of execution against the principal and its return by the sheriff with a report of the result. In this respect a guaranty of the payment of business to be placed and not yet agreed upon or contracted for is, in its legal incidents, analogous to a guaranty of collection or collectibility or the solvency or financial responsibility, which imports the exhaustion of legal remedies against the primary debtor as a condition precedent to suit against the guarantor (infra, p. 31). Such a guaranty is not that guaranty of payment of a definite, ascertained obligation, certain in ts terms and maturity, which makes the promise of the guarantor a primary obligation and which constitutes it either a suretyship (and not a guaranty), of a promise to pay the guarantor’s and not another’s debt (likewise not a guaranty, though
Ordered accordingly.