52 N.Y.S. 827 | N.Y. App. Div. | 1898
The appellant was a stockholder and director in the R. M. Bishop Cigar Company, a corporation organized under the laws of the State of Ohio, and doing business in Cincinnati, in that State. On the 4th of December, 1891, the cigar company desired to borrow money from the plaintiff, and the plaintiff was willing to make loans to it,
The defendant insists, in the first place, that the guaranty is not a continuing one ; that it provided only for the payment of notes upon which money was actually advanced, and did not provide for or require the defendant to guarantee the payment of notes which were received in renewal of other notes, upon which the money had not been actually advanced. This contention is clearly erroneous. The consideration of the guaranty in terms is, that the bank shall loan to the company such sums as from time to time it may require, and the agreement is to guarantee the payment to the bank of all notes which the bank might receive from or discount for said company, and it is to pay to the bank any notes which might remain unpaid within a year from the date of the guaranty, not exceeding the sum of $10,000. This agreement had plainly in view the ordinary course of business between a bank and its customers, and clearly provided for such advances of money as might ordinarily be expected to be made by a bank to a person in business and requiring loans from time to time. The money was not to be advanced in one sum, but the agreement of the bank was to loan the company such sums from time to time as it might require. There was no limit to the purposes for which those loans might be made, and the bank was entitled to make them, not only for the purpose of being used in the business of the company, but for the purpose of renewing other loans which had previously been made by the discount of new notes. Money advanced for either of these purposes was clearly within the terms of the guaranty. The rule of construction of papers of this kind does not seem to be clearly understood. It has
There can be no doubt that on the first of December the bank was in a situation to enforce the guaranty against those people who had signed it; but the defendant claims that by the giving of the note of December first, payable on demand after date, the term of payment of the paper was extended so that, as a matter of fact, oil the fourth of December, when the guaranty, by its terms, expired, there was no unpaid paper then due, and, therefore, she was not liable. This note was dated on the 1st day of December, 1892. It was payable, by its terms, on demand after date and it became due at once under the Laws of Ohio. (Union Central Life Ins. Co. v. Curtis, 35 Ohio St. 357.) But even if it be said, as is claimed by the defendant, that because the note was due on demand after date, no demand .could be made until the day after the date of the note, yet that construction would make the note payable on the second day of December. As a matter of fact, however, it appears that the note was given after the day of its date, and, it was due, therefore, like any other demand note, immediately upon its delivery, and it could have been sued at once. (McMullen v. Rafferty, 89 N. Y. 456.) It did not, therefore, operate to extend the time of payment or in any way discharge the surety. The seven original notes became due on the first day of December. There was no time after that date in which this payment was not actually due and could
It appears that after the commencement of this action the other guarantors, exclusive of the defendant, paid to the plaintiff the amount owing from the defendant. By that payment they clearly became subrogated to the rights of the bank against the defendant (Brandt on Guar. & Sur. § 269; Cuyler v. Ensworth, 6 Paige, 32; Townsend v. Whitney, 75 N. Y. 425, 430), and were entitled to receive from the bank the principal undertaking itself and to enforce as against the defendant the same right which the bank, the principal creditor, might have enforced. The interest of the bank was, therefore, transferred to them; and, pursuant to the express rule of the Code of Civil Procedure, the action might be continued in the name of the bank which was the original party. (Code Civ. Proc, § 756.)
The defendant had notice of the fact that the other guarantors had paid the amount claimed by the plaintiff upon this guaranty and sought to be recovered from her, and that they claimed to be subrogated to the plaintiff’s rights and intended to continue the action in its name. If she had desired, she might have procured the other guarantors to be substituted as plaintiffs in the place of the bank; but, not having done this, she is not now in a situation to' insist that the action should not proceed to judgment in the name of the original plaintiff. (McGean v. Metropolitan Elevated Ry. Co., 133 N. Y. 9.)
The judgment was clearly right, and should be affirmed, with costs.
Van Brunt, P. J., Patterson and Ingraham, JJ., concurred.
Judgment affirmed, with costs.