Gile Grocery Co. v. Lachmund
146 P. 519
Or.
1915
Check Treatment
Mr. Justice Burnett

delivered the opinion of the court.

1. The defendant maintains that he is not liable upon his contract of guaranty unless the plaintiff first had exhausted all its legal remedies against Grlisan without success.. Whatever the rule may be in other jurisdictions, it is settled in Oregon against the contention of the defendant by Delsman v. Friedlander, 40 Or. 33 (66 Pac. 297), Mr. Justice Wolverton there saying:

“Primarily, it may be stated as a legal proposition sustained and established by the very great weight of judicial opinion that a guaranty of the payment of a note or other obligation is an absolute undertaking to pay it when due, and that no demand or notice of nonpayment is necessary or requisite to fix the liability of the guarantor; and that mere passiveness on the part of the holder will not release such guarantor, *125even if the maker was solvent at its maturity, and thereafter became insolvent” — citing authorities.

2. It seems that the plaintiff’s account against Glisan began as early as January 4, 1912, sixteen days prior to the date of the defendant’s engagement, and continued to the withdrawal of his guaranty. The defendant argues that he is entitled to have applied to the exoneration of his undertaking all moneys paid by Glisan to plaintiff during the existence of the guaranty. This point is also settled adversely to the defendant’s contention by Trullinger. v. Crane, 7 Or. 228 (33 Am. Rep. 708); Wilson v. Allen & Lewis, 11 Or. 154 (2 Pac. 91); Anderson v. Griffith, 51 Or. 116, (93 Pac. 934); Montour v. Grand Lodge, 38 Or. 47 (62 Pac. 524); Halstead v. Griefin, 173 Ill. App. 551; Hansen v. Rounsavell, 74 Ill. 238. Under the authorities cited, the plaintiff had the clear right, in the absence of any direction by Glisan, to apply payments made by the latter to that portion of the account not supported by the defendant’s guaranty. So far as appears, the latter had no lien upon any of the funds, or the sources thereof, which Glisan paid to the plaintiff. In a sense it may be said that the defendant had no privity of estate in any of the moneys paid by Glisan, and hence could not direct the application of the payments. That was a matter between the principal debtor and the plaintiff, his creditor; and, in the absence of any showing of direction by Glisan, the plaintiff could apply the payment to the unsecured portion of the account at his election.

3. It is assigned as error that:

“The court erred in instructing the jury on the question of the value of the goods for the reason that there was no proof of the agreed value thereof or of the reasonable value of the same.”

*126Reference to the quoted portion of the answer, however, shows that the defendant himself alleges that between the date of the guaranty and the time it was withdrawn the plaintiff sold and delivered to Glisan goods, wares and merchandise of the value of $399.92. This statement of value coming from the defendant obviates the error assigned, and likewise renders negligible the other specification that the court erred in permitting testimony to be received about statements of account passing between plaintiff and Glisan.

Finding no error, the judgment is affirmed.

Affirmed.

Mr. Chief Justice Moore, Mr. Justice McBride and Mr. Justice Benson concur.