55 Conn. 251 | Conn. | 1887
This is a complaint to recover upon a guar
1. Was the guaranty an absolute or a conditional one? It was in these words :—“ I guarantee the within note good, till paid.”
The complaint is framed upon the assumption that it is an absolute guaranty of payment that required no action on the part of the payee or the plaintiff, while the demurrer on the other hand assumes that the guaranty is conditional and means that the note is capable of being collected by the use of ordinary diligence. We think the defendant’s construction must be accepted as the true one.
All the authorities agree that there is a broad distinction between guarantees of payment and guarantees of collection. The former are an absolute unconditional undertaking on the part of the guarantor that the maker will pay the note, while the latter are an undertaking to pay if payment cannot by reasonable diligence be obtained from the principal debtor.
There is some disagreement in the authorities as to the precise steps to be taken by the holder of a conditional guaranty in order to subject the guarantor, but this distinction is of no importance in this ease, inasmuch as the complaint, in effect, concedes that no steps whatever were taken to collect the note of the maker, and there is no averment that it was not a collectible note.
There has been no case before this court where the words of the guaranty were precisely like this. That of Allen v. Rundle, 50 Conn., 20, comes nearest to it; but there the words were “ good and collectible,” and they were construed as constituting a conditional guaranty. We do not think the addition of the word “ collectible ” controlled that case, for the words “good” and “collectible” are of similar import when used in such connection.
It seems to us unnatural to give it all the force that attaches to the word “ payment,” for the latter refers to the act of the debtor alone irrespective of any steps taken by the creditor, while the former word refers to and qualifies' the note. The maker of a note may pay it when no one would have considered the note good, and on the other hand a note may be considered perfectly good which the maker would not pay till compelled to do so. The accepted test of the goodness of a note is its capability of being collected independent of any voluntary act of payment on the part of the maker, and the use of ordinary diligence on the part of the holder is implied where diligence would avail.
In City Savings Bank v. Hopson, supra, there was no word to limit the extent of the guaranty except the words “ till paid.” The court therefore considered the guaranty as belonging to the stronger class of absolute guarantees requiring actual payment, and the case was likened to that of Breed v. Hillhouse, 7 Conn., 523, where the word “payment ” was used.
Our position receives strong confirmation from distinguished text writers and from decisions in other jurisdictions.
In Edwards on Bills and Promissory Rotes, side page 235, it is said:—“ ‘ I warrant this note good ’ means that it is collectible, that the maker is responsible; it is not an engagement that the note will be promptly paid at maturity;
The case of Kock v. Melhorn, 25 Penn. St., 89, has been cited by text writers as opposed to the construction given above, and so far as Ave have noticed it is the only opposing case. It seems to us however that it is distinguishable from the cases cited. It was an action on a parol warranty of a note, where the words used were that the note Avas “ just as good as if he would give him [the plaintiff] the money—that he Avould insure it as good as gold and silver.” It will be seen that the meaning did not depend on the word “ good ” alone; there is specially made an extra standard of the goodness intended, that is, it was just as good as if he would give him the money, which is actual payment; and when it was added:—“ as good as gold and silver,” it referred to money in hand. Such language might well be held equivalent to a Avarranty of payment, as it was by that court.
The conclusion already reached amply sustains the judg
There was no error in the judgment complained of.
In this opinion the other judges concurred.