5 Denio 484 | N.Y. Sup. Ct. | 1848
The writing signed by these defendants wat. not a promissory note.
A promissoiy noté may be defined to be a written engagement by one personj to pay absolutely and unconditionally to
I agree that the defendants, if liable at all, are hoi den as guarantors, for their engagement was of that nature. A guaranty is an agreement not under seal, “ whereby one person engages to be answerable for the debt, default, or miscarriage of another.” It is not a direct engagement to pay one’s own debt, or perform an obligation resting primarily on the guarantor, for it assumes the liability of another as principal, and for whom the guarantor becomes surety. The engagement is in aid of, and collateral to, the original liability of the principal debtor or party for whom the guaranty is given. (Pitman, Pr. & Surety, 1 to 7, 13, 92; Theo. Pr. & Surety, 1, 5, 36;
Such being the nature of a contract of guaranty, the defendants’ engagement was obviously of that character. It was not a promise by the defendants to pay their own debt, but that Kathern & Doolittle should pay theirs. They were primarily holden to pay the money specified in the note, and the defendants were only liable as guarantors that the note should be paid by the makers. This is entirely clear on the terms of the two instruments, for one is an absolute engagement by the makers of a promissory note, to pay a specified sum, while the other is but a collateral guaranty that the makers shall do as they agreed. The defendants were not to be liable as principal debtors, but only in the event of a failure to pay by the makers of the note. The engagement of the defendants was a “special promise to answer for the debt, default or miscarriage” of Kathern & Doolittle; and as the written agreement does not express any consideration for the promise, the statute makes it void. This promise is in writing, and so far the statute is complied with. But the statute requires something more, for the consideration of the agreement must be expressed in the writing which is signed by the party who is to be thereby charged. (2 R. S. 135, § 2.) Here the consideration is not so expressed, and the promise is void. I know there are some cases which hold that such an engagement as the one signed by these defendants, is a promissory note; but they are by no means all of that character, for others hold directly the contrary.
It is well settled that a guaranty made at the same time with the principal contract, and constituting “an essential ground of the credit given to the principal debtor,” requires no other consideration than that which upholds the principal contract. It has also been held, that in such cases the consideration need not be expressed in the written guaranty, but may be shown by parol evidence. (Story on Prom. Notes, § 457, citing Leonard v. Vredenburgh; 8 John. 29, and other cases.) This principle need not be denied, for the facts do not admit
I must, however, say, that whatever may have been the true rule under the former statute of this state, which was in force when Leonard v. Vredenburgh and the other cases referred to in Story on Promissory Notes were decided, I am wholly unable to see how any collateral undertaking for the debt, default or miscarriage of another, no matter when made, can be held valid under the present statute. Its language is explicit: “Every special promise to answer for the debt, default or miscarriage of another person”—“ shall be void unless such agreement, or some note or memorandum thereof, expressing the consideration, be in writing, and subscribed by the party to be charged therewith.” (2 R. S. 135, § 2.) Here is no exception in terms, nor do I find any in the spirit of the enactment. It extends to every collateral undertaking for another person, whether made at the time when the debt of the principal was created or at any after period.
It is wholly impossible to reconcile the numerous cases and judicial dicta on this subject, which may be found in the reports of this and other states, and the attempt would lead only to uncertainty and confusion. It has been my design to state with all possible brevity, the grounds for the conclusion that the defendants’ agreement was not a promissory note but a collateral guaranty for Kathern & Doolittle, and, no consideration being expressed therein, that it is void.
The principles adverted to as the basis of this conclusion.
It is insisted on the part of the defendants, that the instrument written on the note in question and signed by them, was an undertaking to answer for the debt of third persons and was void, because the consideration wás not expressed therein. This point was urged upon the consideration of the court with great earnestness and ability, and demands careful examination. This point arises under the statute of frauds. The former statute of frauds in operation in this state previous to 1830, was taken from 29 Chs. 2, c. 3, which required that the agreement should be in writing; but nothing was said in terms about the consideration. In giving a construction to that statute, it was held in the leading- case of Wain v. Warlters, (5 East, 10,) that the consideration, as well as the promise, must be in writing, and that parol proof was not admissible to show that there was in fact a good consideration. The same principle was adopted in this court, in Sears v. Brink, (3 John. 210.) This principle has been perhaps substantially adhered to, only as the old statute did not require that the consideration should be set forth in terms, it was held sufficient if one could be fairly implied from the instrument, or if it could, as it were, be spelt out from the agreement. (Rogers v. Kneeland, 10 Wend. 250; Newbury v. Armstrong, 4 Car. & Payne, 59:) The revised statutes seem to have been framed to limit or cut off any latitude of construction in this respect. They provide that every special promise to answer for the debt, default or.miscarriage of another person, shall be void, unless the agreement or some note or memorandum thereof, expressing the consideration, be in writing, and subscribed by the party to be charged therewith. (2 R. S, 135, § 2.)
This was a decision expressly under the statute, and there were no similar cases which arose in which its authority was questioned, until Manrow v. Durham, (3 Hill, 584.) That was the case of a note made by a third person, payable to C. R. Durham or bearer, on the 1st of January, and dated July 1, 1839; on the back was endorsed a guaranty signed by the defendants, as follows: “ We guaranty the payment of the within note. Dec. 12, 1839.” This was delivered with the note to the plaintiff, on the day of its date, in part payment for the purchase of a horse. The plaintiff was nonsuited in the Oneida common pleas, on the ground that the consideration was not expressed in the guaranty. On error to this court, the judg ment below was reversed, it being held by a majority of the court that this guai anty was in legal effect a promissory note and
In that interval of time there were cases passed upon which were different in their facts from those which we have just been considering. In some of the cases, the material difference in the facts is, that the note and guaranty were made and delivered at the same time, and were part of the same transaction, so that both instruments might be held to be but one contract: the consideration upholding the one supporting the other. Lequeer v. Prosser, (1 Hill, 256,) is of this character. The note was made by Edson & Arnold to one Parsons or bearer, with a guaranty thereon signed by Prosser in these words: “ For value received I guaranty the payment of the within note, and waive notice of non-payment.” This note and guaranty were delivered by Edson & Arnold to Parsons as security for property sold, the sale having been made on condition that the purchaser should give the seller a good endorsed note. This was held to be a promissory note, and that the guarantor’s liability was the same as if he had signed his name directly to a joint and several note as surety for the maker. The case was taken to the court for the correction of errors, and the judgment of the supreme court affirmed. (4 Hill, 420.) In the latter court, it was intimated that the defendant was liable in the character of endorser, having waived notice of non-payment. In neither court, however, was any point made in relation to the statute of frauds. In Hough v. Gray, (19 Wend. 202,) the note and guaranty were of the same date, and the note with the guaranty thereon delivered to the payee for property sold, for which the guarantor agreed to become surety. It was held that the guarantor was liable as a joint and several promisor with the maker of the note. Dean v. Hall, (17 Wend. 214,) was referred to as containing the authorities elaborated on such doctrines. Nothing was said about the-statute of frauds. In Ketchell v. Burns, (24 Wend. 456,) the consideration was expressed in the guaranty, so that no question could arise under the statute of frauds in that case. Oakley v. Boorman, (21 Wend. 588,) was held to be the case of indorsement, technically, where the
We thus see that the case of Packer v. Willson was not questioned in all 'the intervening cases, until the decision of Manrow v. Durham. The statute of frauds was not made a point in any of them. It is true, in many of these cases it would appear as if the statute of frauds might legitimately have been made, a question. It would strike, one as if the guaranty were an undertaking to answer for the debt of a third person. But this question was not raised, and this class of cases seems to have established a' doctrine in regard to the liability of the guarantor, independent of the statute; a doctrine to which Justice Bronson seems to have yielded his assent in his dissenting opinion before referred to in Manrow v. Durham.
After Packer V. Willson, there was no case arose precisely similar in its circumstances until that of Manrow v. Durham. I think the decision in the latter case might have followed the former without calling in question the propriety of any of the intervening decisions. In my judgment it is to be regretted that it did not, as- establishing: the-only sound construction- to be given to- the statute. -But the-contrary doctrine was sustained. Manrow v. Durham, was followed by Legget v. Raymond ; and. the only question now is, whether the stability of our decisions does, not -require that' the doctrine maintained by: them should:be recognized hereafter, leaving it to the court of dernier resort to make the necessary correction.
The case, however, now .under consideration is not parallel
I must say, that though this doctrine seems to be established by a number of adjudged cases, I am not at all satisfied with it. An undertaking of this kind does not answer the definition of a promissory note given in all the books, and which we universally recognize as correct. It is essential to a promissory note, that the maker should himself undertake to pay absolutely. In an undertaking of this kind, the promisor, in
I cannot satisfactorily acquit myself of the responsibility cast úpon me to respect and obey the deliberate expression of the legislative will, without declaring that in my judgment the present case is one covered precisely by the statute. I am constrained therefore to say, notwithstanding the decisions which have introduced a new doctrine in cases precisely like the present, and notwithstanding the conflicting decisions in cases very nearly like this in their facts—wholly like it in principle—that the obligation upon which this action is brought, is an undertaking to answer for the debt of another. In such cases the statute requires the consideration to be expressed in writing,
• McKissock. J. concurred in the result of these opinions.
New trial granted.