47 La. Ann. 505 | La. | 1895
Lead Opinion
On subsequent and final hearing the opinion of the court was delivered by
The important issues in this case, after the fullest discussion by counsel, have been re-examined with earnest attention.
The suit is founded on a paper dated 14th June, 1891, signed by-defendant, C. Lazard, addressed to plaintiffs, expressing that he-agrees to become surety for Block & Bro., jointly and severally with them, for ten thousand dollars, the agreement to bind till the 15th October, 1891. The argument for plaintiffs maintains that the paper-obtained from defendant, Lazard, by one of the firm of Block & Bro., by him transmitted to plaintiffs, residing in California, with no intercourse whatever between plaintiffs and defendant, either before or after the execution of the paper, binds him for ten thousand dollars of the indebtedness of Block & Bro. to plaintiffs, existing at the date of the letter, or contracted after, and even on terms of credit extending beyond the limits expressed in the paper. On the other hand, it is contended on behalf of defendant that the paper, importing merely an engagement to become surety, with -no designation of:
In ordinary significance suretyship refers to an existing debt, as the Code puts it: .suretyship is the accessory contract of one who '■binds himself for the debt of another. But it is not to be doubted that under the Code the contract may bind for future as well as existing or past indebtedness.' The expansiveness of the Oode may be deemed to embrace suretyship in the largest sense, including, of course, the guarantees and bills of credit so familiar in commercial usage. Civil Code, Arts. 3035, 3036; 1 Bouvier’s Law Dictionary, 645. But it seems natural, if suretyship was intended to cover past and future indebtedness of the debtor, the purpose would be expressed. One proposing to bind himself as surety for indebtedness, future and past, andjdesiring to be understood, would hardly content himself with the mere expression of agreeing to become surety, with no indication of the debt intended to be secured. On the other hand, the creditor seeking a surety for existing, as well as prospective liability of his debtor, would not deem the purpose accomplished by the scant agreement to become surety, with no debt mentioned, future or past. The contention of plaintiffs is, this court is to read into this paper that which is not expressed, and give it the largest significance of suretyship: that is, a suretyship up to ten thousand dollars for the indebtedness, past and future, of Block & Bro. to plaintiffs. It must be borne in mind, too, that the surety is entitled to a strict construction of his contract. He is protected from any interpretation of his contract not resting on clear expression or plain implication. The Code declares: suretyship is not to be presumed, should be expressed, and is to be restricted within the limits intended. j; Civil [Code, Art. 3039; Bank vs. Hagan, 1 An. 62; Freeland vs. Briscoe, 3 An. 257. It seems to us, to make this paper cover past as well as future indebtedness would be to supply by inference that which is neither expressed or implied. If it stands for
Indeed, the proof is in the record plaintiffs were not satisfied with the paper. In their communication to Block & Bro. acknowledging its receipt, they state it is not in correct form, and of no “ legal force,” that they will send another, but it was never sent. The-plaintiffs’ communication forcibly suggests whether they were ever influenced by the paper, of no “legal force,” as they expressed it, but on which they are now asserting defendant’s liability. If of any obligatory force, it would seem to be beyond their appreciation of it, expressed to their correspondent. On the character-of this paper, we have, too, the undisputed testimony of defendant, that he gave it on Block’s application, to enable him to make a purchase of wine from plaintiff, susceptible of speedy sale and quick profit, so that defendant’s suretyship would be short. Hence, defendant’s limitation not to be bound beyond 15th October, 1891. True, Block’s representation would not affect plaintiffs, if the paper was worded to cover a wider or different liability than that intended. The paper authorized no such interpretation as plaintiff now seeks to place on it. Nor are plaintiffs in any condition to invoke a construction beyond the fair import of its terms. It seems to us to-hold this paper had any reference to past indebtedness is to disregard its language [and close our eyes to the testimony of its purpose.
In the face of the limitation in the paper, the defendant is sought-to be held for purchases of Block & Bro. beyond the period announced in plain terms as the duration of his responsibility. Reach
Whether this paper is to be viewed as referring to past or future, ■or both past and future indebtedness of Block & Bro., the question remains, did the mere signing of the paper on Block’s request, and and its transmission by him to plaintiffs, produce any obligation on defendant’s part. In any point of view, is it not indispensable to the creation of any obligation arising on the paper that plaintiffs should have accepted it, and communicated their assent to defendant? If, as we hold, the contemplation of defendant was a suretyship for future debts, Block & Bro. might contract on the faith of his guarantee, was he not entitled to know that plaintiffs acted on it? Can it be admitted that without the slightest intimation to defendant, that his guarantee was accepted, plaintiffs could, at any future time short of prescription, present the paper and claim that defendant was bound for purchases by Block & Bro., of which defendant had neither knowledge or even opportunity of knowledge? If, without assent or communication of any kind by plaintiffs, they can claim in October that defendant’s paper, signed in June, became a contract the moment it was signed, and on that theory hold him liable for goods they chose to sell Block, with the same reason plaintiffs might assert such liability years after, or when their debtors become bankrupt, or in other changed conditions, when no sane man would ask or give the guarantee defendant was content to sign in June, 1891, for an apparently prosperous ñrm. The plaintiffs’ case assumes a most extraordinary contract subsisting and binding defendant, but with no assent on plaintiffs’ part made known to defendant, entitled to know if he was to be held on his guarantee; and another phase of the supposed contract is, that while defendant was
The paper on which this suit is based was executed here. If it imports any obligation, its performance was to be here. Payment, accordingly, is demanded here. In our view our Code is the law to be applied. The Code, too, is in harmony with the general law on the subject. The result would not be at all different if recourse is had to the rules of the commercial law applied in solving questions arising on letters of credit, or the contract of guaranty, as it is termed. It is to be observed that the application of these rules is not excluded, unless contrary to our codal or statutory provisions on the subject. Wagner vs. Kenner, 2 Robinson, 124; Thompson vs. Mylne, 4 An. 210. We think it clear that under the commercial law the guaranty or letter of credit does not bind without acceptance, express or implied. Indeed, this is, in our view, plainly announced in the Louisiana decisions, and to hold otherwise in this case would be a departure from jurisprudence. We state the earlier case in our reports thus: merchants here gave a letter of credit never accepted by the party from whom the proposed advances were to be obtained,
There is no more emphatic statement of the necessity of acceptance than is stated in one of the leading test-books, thus: Guaranty, like all other contracts, requires proposal and acceptance thereof. If, therefore, an offer of guaranty be made to any person, it'is his duty to give notice of his acceptance, or there will be no contract. Story on Contracts, Secs. 852, 853 et seq.; or in the language of the Supreme Court of the United States: “ On a letter of guaranty addressed to a particular person, or to persons generally, for a future credit to be given to a party in whose favor the guarantee is drawn, to charge the guarantor notice is necessary to be given to him that the person giving the credit accepted or acted upon the guaranty, or had given credit upon the faith of it. This is not an open question in this court, after the decisions which have been made in Russell vs. Clark, 7
The court further said:
“ It is in itself a reasonable rule, enabling the guarantor to know the nature and extent of his liability, to exercise due vigilance in guarding himself against losses which might otherwise be unknown to him, and to avail himself of the appropriate means in law and equity to compel the other parties to discharge him from future responsibility.”
The court, after referring to' the various decisions of that court on the subject, and after quoting and affirming 7 Peters, 125, says:
“It is unnecessary, after such clear and decided authority of this court on this point, to fortify it by additional adjudications. We are not aware of any conflict of decision on this point.” Adams vs. Jones, 12 Peters, 207.
It is claimed, however, neither our Code or the decisions afford any solution of this controversy. It is to be governed, it is urged on us, by a statute of California. This contention is on the idea that plaintiffs receiving the paper in California, it became subjected to the law there. The statute is, that on letters of credit notice of the advances is not requisite. It is assumed that the paper, a surety-ship, as it seems, under our Code, is within the purview of the statute, and that concludes the question. Notice of advances on letters of credit may well be dispensed with. The failure of such notice is not, in any case, a defence, unless causing loss to the guarantor. Louisville Mfg. Co. vs. Welsh, 10 Howard, 461 (475) ; Davis vs. Wells, 104 U. S. 170. It is contended the California statute goes further; applies to guarantees, letters of credit or suretyship, and dispenses with any consent to the contract on the part of the guarantor. If so, the law supplies consent, the foundation of contracts. We do not undertake to determine the scope of this statute. The law of a contract is used to denote, as well that of the place where the contract is made, as of the place of performance. The operation of the law of the place of performance is: where the contract made in one place is to be executed iu another. Story, Conflict of Laws, Secs. 233, 234, 280, 284; Pritchard vs. Norton, 106 U. S. 124. The defendant executed the paper in this State. The performance of his contract, if any, was to be here. Here the payment of his alleged obligation was to be demanded, and in our
In reaching our conclusion the contention as to the asserted estop-pel of the defendant, forming so large part the discussion in the briefs and at the bar, has not escaped attention. It is urged that his promise to pay plaintiffs’ demand, and his allegation and oath to the debt sued on in this suit of his firm against Block & Bro., conclude the defendant from disputing plaintiffs’ demand. The proof is, demand was made on defendant in the early part of October, 1891, for the money claimed on his paper of the preceding June. It may well, we think, be assumed that defendant was not at all informed on the question of his liability. The inquiry as to the effect of his paper occupying the attention of counsel and of the court for months, it is not to be supposed the defendant was competent to determine on the demand made on him through plaintiffs’ lawyer. But the demand assumed his liability, and defendant’s promise was expressed in his request for time to pay. But he consulted his counsel, was advised there was no liability, and on a second demand being made, defendant replied, through his counsel, he was not bound and would not pay. It seems to us utterly beyond the compass of reasonable discussion to hold the defendant bound, merely and only because of his recognition or promise to pay an asserted debt, promptly withdrawn, on being apprised he was not bound. The law does not bind a man irrevocably by his promise made in error, and admits of any explanation that will avoid the promise. A very familiar illustration, if any was needed that such promises do not bind, is furnished in the instance of the endorser, who, ignorant of his discharge, promises to pay. The law permits explanation of his error, holds the promise for naught, and if he has paid on such promise, gives the action to recover back his money. Story on Notes, Sec. 361; Citizens Bank vs. Dugue, 5 An. 12; Oakey vs. Bank, 17 La. 386; Heath vs. Bank, 7 Rob. 334. We can not, therefore, hold this defendant liable on the ground only, that on the lawyer’s demand he' made a promise, withdrawn soon after, and on which it is not pretended plaintiffs extended any forbearance, or adopted or omitted any action whatever. In the suit of Lazard & Co. against
In onr view the case is with the defendant on the terms of the paper the basis of this suit. That paper excludes liability for the engagements of Block & Bro. maturing after the 15th October, 1891. We have also considered the question whether any contract was ever formed, and on that issue our conclusion is adverse to plaintiff. The grounds of liability urged by plaintiff have had our careful attention. More might have been said with respect to the issues we deem controlling, as well as other phases of the controversy, but the views presented in this opinion dispose of the case.
It is therefore ordered, adjudged and decreed that our former judgment in this case be set aside, and it is now ordered, adjudged and decreed that the judgment of the lower court be affirmed, with costs.
Dissenting Opinion
Dissenting Opinion.
Various grounds have been assigned — which are pressed in argument, oral and printed — why we should grant a rehearing and change our decree; but,' as we are all of the opinion that all of them are groundless, with the exception of one, I will confine my argument to that one exclusively.
This suit is brought against Henry Block & Bro. on their indebtedness to plaintiffs on open account, aggregating something more than ten thousand dollars; and against 0. Lazard, on his written agree
This agreement is of the following tenor, viz.:
“ I hereby agree to become surety for Henry Block & Bro. for the sum of ten thousand dollars, jointly and severally with Henry Block & Bro. This agreement to bind me in the sum of ten thousand dollars, until the 15th of October, 1891.”
The two principal grounds of defence which are set up in the answer, and relied upon in argument, are:
(1) Want of notice by Lachman & Jacobi to Lazard of their acceptance of his agreement; and (2) fraud, on their part, in obtaining it.
Imprimis, these defences involve a manifest contradiction, that is utterly destructive of the defence, in this: If plaintiffs never accepted the defendant’s agreement, they could not have been, at the same time, guilty of fraud in obtaining it; and if they were guilty of fraud in procuring it, certainly notice of their acceptance would have been an unavailing ceremony.
These judicial admissions ought to be the end of the ease.
The only doubt there is in the minds of the members of this court, as to the correctness of our original opinion, is in relation to the plaintiffs’ notice to Lazard of their acceptance of his agreement.
The difficulty of solution arises chiefly from the difficulty there is in determining what the instrument of writing is — one of suretyship, guaranty, or a letter of credit.
In my opinion the agreement of Lazard is one of suretyship for the following reasons, viz.:
1. Because the recitals of the instrument declare that “ I hereby agree to become surety for Henry Block & Bro.”
2. In the brief of counsel in support of this application I find the following admission, viz.:
“ The contract on its face is a contract of suretyship, and the court holds it to be such.”
Again:
“ The court erred in holding that Lazard was not entitled to notice •from the plaintiffs of their acceptance of his alleged contract of suretyship.”
Again:
“The court erred in holding that the letter missive in this cause
That these admissions were deliberately made is attested by the fact that the last two quotations are the headings of the two propo - sitions on which counsel mainly rely, and one of which I have under present consideration.
3. They are in strict keeping with the individual answer of Lazard in this suit, wherein he avers that, if he is in any way liable for the account sued on, Mayer Israel is a co-surety, and that he is entitled to the benefit of division, which he hereby claims;” or, in the alternative, “ the said Mayer Israel being a co-surety, he is entitled to recover against him judgment for one-half of the amount of the judgment rendered against him.” His prayer for judgment conforms to the foregoing allegations of his answer.
4. In the demand that the attorneys of Lachman & Jacobi made upon C. Lazard, under date October 7, 1891, they say inter alios that “we hereby notify you that the indebtedness of Messrs. Henry Block & Bro. to said Lachman & Jacobi, for which you are surety, under your letter of June 4,1891 ‘amounts to ten thousand and seventy-dollars and thirty-four cents. You are aware that attachments, far exceeding Henry Block & Bro.’s assets, have been levied upon them, and we demand immediate payment or we shall institute suit promptly.
“Yoursvery truly,
“Moise & Titche.”
There can be no doubt of the correctness of our opinion in so far as it affirmed that Lazard sustained toward the plaintiffs the relation of surety for Henry Block & Bro. Under the Code “ suretyship is an accessory promise by which a person binds himself for another already bound.” R. C. C. 3035. It is a personal and accessory promise in favor of a third person.
A mortgage is á contract of security for debt. R. C. C. 3278. So is a pledge a contract of security for debt. R. C. C. 3133. A mortgage is “ a species of pledge.” R. C. C. 3279.
All of these engagements are, in another article of the Oode, under the title “of conventional obligations,” placed in the same category, thus:
“ An accessory contract is made for assuring the performance of a
As an agreement of suretyship, or accessory promise, notification of acceptance on the part of Lachman & Jacobi was altogether unnecessary to give it binding force on C. Lazard (1) because the law does not require such notice; and (2) because the terms of the agreement exclude the idea of notice of acceptance being required.
(a) There is nothing said, under the title “ of suretyship,” in the Code, of such notice being required, not even by implication.
This is just what we said in our original opinion; and, after making a quotation therefrom, counsel for applicant say in their brief:
“ True there is no text of the law to that effect, particularly and specially applicable to the contract of suretyship; but there are many texts to that effect which necessarily apply to all contracts, suretyship included.”
Counsel, in support of that proposition, cite quite a number of articles of the Code — 1768, 1779, 1797, 1798, 1800, 1803, 1804, 1809, 1810, 1819, 1997— all of them being found under the title of conventional obligations; and neither of thefti making mention of the notice of the acceptance of a contract of suretyship. '
This admission is an absolute surrender of the whole question; for it is elementary that the articles of the Code which are collated under any given title must be consulted in determining the essential elements of the contract which is therein specified. Wé may examine other articles and titles for the purpose of ascertaining the effect of an article under examination, but for such purpose only.
But, strange to say, counsel add — in the very next sentence to the one above quoted — that “suretyship is a commutative contract,” referring to R. C. C. 1768 under the title “ of conventional obligations.” And, in making that statement, seem to have overlooked thea almost immediately following Art. 1771, which declares that suretyship is an “accessory contract,” “such as mortgage or pledge.”
It must be borne in mind that the question is not as to Lachman & Jacobi’s consent to a contract, but as to their failure to give the surety notice of their acceptance of their agreement. This agreement is an accessory promise which C. Lazard executed in favor of Lachman & Jacobi ex gratia. The primary obligation is from Henry Block & Bro. to Lachman & Jacobi. It is therefore clear that the rules of
(6) The terms of Lazard’s agreement exclude the idea of Lachman & Jacobi giving notice of acceptance; because they are absolute and unconditional, and clearly import a binding agreement from and after date, for it says:
“I hereby agree to become surety for Henry Block & Bro. for the sum of ten thousand dollars jointly and severally with Henry Block & Bro. This agreement to bind me in the sum of ten thousand dollars until the 15th of October, 1891.”
Not only does 0. Lazard “ agree to become surety for Henry Block & Bro.,” but this agreement is made 11 jointly and severally with Henry Block & Bro.”
Nor is this all, for the foregoing is supplemented thus: ‘ 1 This agreement to bind me in the sum of ten thousand dollars until the 15th of October, 1891.” To bind him, when? Evidently from the date of the agreement. To bind him how? Jointly and severally with Henry Block & Bro. for their indebtedness to Lachman & Jacobi. What is the effect of such a promise of suretyship? Let us see what the Oode says under the title which treats “ of the effects of suretyship between the creditor and the surety,” with reference to this character of suretyship; and looking into the Oode on the subject we find the following, viz.:
“ The obligation of the surety toward the creditor is to pay him in case the debtor should not himself satisfy the debt; and the property of such debtor is to be previously discussed or seized, unless the surety should have renounced the plea of discussion, or should be bound in solido jointly with the debtor, in which case the effects of his engagement are to be regulated by the same principles which have been established for debtors in solido.” R. C. C. 3045. (Our italics.)
Let us then examine the principles which have been established for debtors in solido, and thus ascertain what are the effects of 0. Lazard’s solidary engagement with Henry Block & Bro. in favor of Lachman & Jacobi.
A single reference will answer the purpose, for the provisions of R. C. C. 2094, to be found in the chapter which treats “ of the rules which govern obligations with respect to debtors in solido,” are: “ The creditor of an obligation contracted in solido may apply to any one of the debtors he pleases without the debtor’s having a right to plead the benefit of division.”
This is evidently true, and demonstrates that C. Lazara was not entitled to notice by Lachman & Jacobi of their acceptance of his solidary suretyship.
To arrive at this conclusion, this court would have to maintain the doctrine that the surety in solido on any conventional obligation would not be bound without the obligee’s formal notice of acceptance first given.
This is not true, of course.
But it is insisted that Lazard’s agreement is merely a mercantile letter of credit, and hence notice of acceptance is of its essence.
Let us examine this proposition.
Had Lazard’s engagement been restricted to the phrase “I hereby agree to become surety for Henry Block & Bro. for the sum of ten thousand dollars, ’ ’ and all that follows omitted, there might have been plaus - ibifity in the contention; but the remaining words of the sentence, “ jointly and severally with Henry Block & Bro.,” give it the character of a solidary engagement with the plaintiffs’ debtors, which the Code declares shall be “ regulated by the same principles which have-been established for debtors in solido ” R. C. C., 3045.
And the concluding sentence, “this agreement to hind me in the sum of ten thousand dollars, until the 15th of October, 1891,” even more clearly evidences the immediate and unconditional effect of Lazard’s engagement.
Words more potent could not have been chosen for the purpose-of showing that Lazard’s evident intention was to bind himself immediately and in any contingency.
His agreement is altogether different from the one that figured in the case of Menard vs. Scudder, 7 An. 385.
That was of the following tenor, viz:
“ Baton Rouge, December 4, 1849.
“I do recommend my friend, J. B. Scudder, of the parish of East Baton Rouge, a planter, and any funds he may raise, or acceptances, in case he does not pay, I bind myself to pay.
“James McCalop.”,
They also expressed the opinion that notice of its acceptance was necessary; but it is interesting and instructive to observe the grounds they put that opinion upon. They say:
“ For when the letter of guaranty is addressed to the public at-large; when it is a proposition, and to attach upon future transactions ; when it is unlimited in amount and indefinite in duration, and is, by its nature, subjeet to recall, it seems manifestly just that the guarantor should be entitled to notice of acceptance within a reasonable time from the person who undertakes to act upon its faith.”' (Our-italics.)
The agreement of Lazard is wholly different in every respect.
But if the agreement of Lazard be taken for a letter of credit, it is a foreign and not a domestic contract. It was drawn and signed in New Orleans, La., to have effect in San Francisco, Oal. It was addressed to Lachman & Jacobi, of San Francisco, by C. Lazard, of New Orleans. It was intended to form the basis of a line of credit the former were to give to Henry Block & Bro., as well as to secure their existing indebtedness.
The precept of our Code applicable to this kind of an engagement is this:
“But the effect of acts passed in one country to have effect in another country is regulated by the laws of the country where such acts are to have effect.” R. C. C. 10. In our jurisprudence this article has been frequently applied to similar engagements.
In Whiston vs. Stodder, 8 M. 135, it was held that “ a contract between persons separated from each other is consummated in and governed by the laws of the place where the final assent is given. So an order for goods from one in Louisiana on another in England is governed by the English law.” Shaw vs. Oakey, 3 R. 361.
In Vidal vs. Thompson, 11 M. 23, it was held that “ the laws and usages of the place where the obligation is to be fulfilled must regulate its performance.”
In Zacharie vs. O’Beirne, 6 La. 402, it was held that “ a mortgage given in one State, to secure advances to be made by a mortgagee.
In Beirne vs. Patton, 17 La. 589, it was held that “ the validity of a contract made in one place, tacitly, or expressly to be performed in another, depends upon the laws of the latter.”
But perhaps the strongest and clearest illustration of this principle of law is to be found in the recent ease of Claflin vs. Mayer, 41 An. 1048, in which a ease is stated in which “the completion of the contract, the acceptance of the price and conditions, depended entirely upon the non-resident creditors.” “When,” the court say, “the agent exhibited the samples under their restricted authority, and transmitted their orders to their principal, there was no obligation created which the buyer could enforce. When the proposal to purchase, as forwarded by the agent, was accepted by his principal, then there was a contract created which the buyer in New Orleans could enforce.”
Again:
“In the instant case there is no difference between the proposal to purchase forwarded by the agent, and one transmitted through the mail by the buyer. It is not doubted that purchases by order by the buyer himself become contracts of the place where the order is filled (our italics). Gates vs. Gaither, 46 An. 286; Succession of Larendon, 39 An. 952. (Italics by the J., dissenting.)
Unquestionably, Lazard’s engagement, considered as a letter of credit, is a California contract, the city of San Francisco being the place of acceptance, as well as the place where the orders of Henry Block & Bro. were to be thereunder filled.
But, in this view of the case, Lazard was entitled to no notice of acceptance, because the Civil Code of California provides that “ the writer of a letter of credit is liable for credit given upon it, without notice to him, unless its terms express or imply the necessity of giving notice.” Civil Code of California, Art. 2865.
The application of the law of the place of acceptance destroys this contention of the defendant, altogether.
But let me go a step further and consider Lazard’s agreement as a common law guaranty; and what is the result ?
On this proposition it is only necessary for us to consider one case —Davis vs. Wells, 104 U. S. 159— as it is conceded to be the leading case on that question. Its syllabus is as follows, viz.:
Applying that rule to Lazard’s agreement, it is quite evident that he was entitled to no notice of acceptance, because it is not a mere proposal but a solidary engagement with Henry Block & Bro.
This was the feature of the contract Davis entered into with Wells, Fargo & Co., which the Supreme Court particularly emphasized, as controlling their decision; for, in treating of this absolute and unconditional feature of it, they say:
“ But, if we should consider that, notwithstanding the completeness of the contract as such, the guaranty of the future advances was subject to condition imposed by law, that notice should be given to the guarantor that the guarantee either would or had acted upon the faith of it, we are to inquire what effect is to be given to the use of the words which declare that the guarantors thereby ‘guaranty unto them, the said Wells, Fargo & Co., unconditionally and at all times, any indebtedness of Gordon & Co., to the exienb and not exceeding the sum of ten thousand dollars, for any overdraft now made or that may be hereafter made at the bank of said Wells, Fargo & Co.
“ Upon the supposition now made, the notice necessary arises upon the nature of such guaranty.
“ It is not, and can not be, claimed that such a condition is so essential to the obligation that it can not be waived. We do not see what less effect can be ascribed to the words quoted than that all conditions that would otherwise qualify the obligation are by agreement expunged from it and made void.
“ The agreement becomes thereby absolute and unqualified; free from all conditions whatever. This is the natural, obvious and ordinary meaning of the terms employed, and we can not doubt that they express the real meaning of the parties.
“It was their manifest intention to make it unambiguous that Wells, Fargo & Co., for any indebtedness that might arise to them in consequence of any overdrafts of Gordon & Co., might securely look to the guarantors, without the performance, on their part, of any conditions precedent thereto whatever.” (Italics by the J., dissenting.)
The court placed their decision squarely upon the absolute terms
That decision furnishes a conclusive answer to the contention of defendant’s counsel.
The next proposition that is insisted upon is, that in no event can Lazard be bound for the debts Henry Block & Bro. had already contracted at the date of his agreement, June 4, 1891.
Why not? The terms of his agreement are general, viz.: “I hereby become surety for Henry Block & Bro. for ten thousand dollars.” Also: “This agreement to bind me in the sum of ten thousand dollars until the 15th of October, 1891.” They are without any limitation or restriction as to any particular indebtedness of Henry Block & Bro., for which Lazard obligated himself as surety, past, present or future.
As a man binds himself, so will he be bound.
The law of suretyship puts no limitation upon such agreements. Quite the contrary, for the Code declares that “suretyship is an accessory promise, by which a person binds himself for another already bound.” Revised Civil Code, 3035.
That article may be interpreted to mean “ already bound” for an existing indebtedness, or .for an indebtedness to be created in the future. The essential thing is that the surety shall bind himself as the obligor is bound, and not differently.
But if this is considered to be a doubtful proposition, the matter is pat at rest by the parties themselves pending their negotiations on the subject.
On the 25th of May, 1891, plaintiff wrote a. letter demanding of Henry Block & Bro. a guaranty in these words, viz.:
“ You must also secure us in some way for money owing us for merchandise, and a guaranty to the amount of ten thousand dollars from your father-in-law would be acceptable.”
This letter closes with this sentence, viz:
“ The guaranty written of we want in such shape that it covers
A similar request is made in their letter addressed to Henry Block on the following day. On the 3d of June these two letters were followed by a telegram of similar purport.
Immediately upon the receipt of those letters and telegram the agreement of 0. Lazard was procured, and on the 4th of June the following letter was mailed to the plaintiffs, viz.:
“ New Orleans, La., June 4, 189L-
“ Messrs. Laoliman & Jacobi, San Francisco, Gal.:
“Dear Sirs — Your telegram of the third to hand and contents noted, and to-day wire you, Lazard’s guaranty mailed to-day, which I enclose herewith. If I or our firm owe you this on that date, same will be promptly paid by C. Lazard & Co.
“Henry Block.”
These letters, amongst others, were introduced in evidence by 0. Lazard, and they are as binding on him as any other part of the testimony, and from its effect there is no possible escape for him.
Hence we have proved, “ out of the mouth of his own witnesses,” that the agreement was intended to secure the payment of Henry Block & Bro.’s merchandise account then due to the plaintiffs, as well as their future and prospective indebtedness up to the 15th of October, 1891.
But what is an even more important and conspicuous fact is that Lachman & Jacobi, over their own signatures, negotiated this guaranty, and influenced and procured the ag eement; and they indicated their willingness to accept C. Lazard as surety for ten thousand dollars. They telegraphed for it on the 3d of June, and it was promptly forwarded on June 4 by mail, and explained by wire. All of this correspondence is put in evidence by C. Lazard.
In our original opinion (see 15 So. Rep. 649) we held that the allegations of the plaintiffs’ petition in the suit of C. Lazard & Co. vs. Henry Block & Bro. — having been sworn to by C. Lazard, the senior member of that firm — constituted “ judicial admissions of a party to a suit, which can not be altered at will to the detriment of the other party, or with respect to those persons having an adverse interest in them.”
The purpose and scope of this expression were to affirm that if it
Plaintiffs’ proposition is that, in this suit against Henry Block & Bro. and C. Lazard on the account and contract of suretyship, the latter can not deny, for the purpose of relieving himself from liability, the binding force of a contract, the benefit of which he had sought and obtained in the former suit, by procuring for his firm the first attachment of all the property of Henry Block & Bro., the common debtors of both parties, and defendants in both suits at the same time, and the appropriation of the proceeds of the sale of the whole of their property to the payment of the debts of his firm to the exclusion of all other creditor's, plaintiffs included.
Counsel for Lazard, in their brief, do not deny that the amount of this ten thousand dollar suretyship was included in the suit of C. Lazard & Co. vs. Henry Block & Bro., but, on the contrary, affirm that to be a fact, and insist that it was not in any way binding on C. Lazard & Co. For amongst other things they say:
“That suit was brought by the commercial firm of C. Lazard & Co. That firm was absolutely distinct from C. Lazard. C. Lazard’s obligations were not those of the firm. C. Lazard’s rights were not those of the firm. The firm was no party to this alleged contract of suretyship. Even if Lazard had paid every dollar of his obligation, the firm could not have recovered a cent from Block & Bro. The firm had no right, power, or authority to sue on any individual claim of C. Lazard.”
All that may be admitted at once, for it is not contended that C. Lazard & Co. were in any manner bound to plaintiffs, through the instrumentality of that suit. But it is urged, and our opinion holds, that C. Lazard’s affidavit to the petition in that suit, including the suretyship, is a binding judicial admission of it from which he can not escape, notwithstanding it was incorporated therein without the knowledge or consent of his firm.
Counsel seem to take comfort from the fact that there was no averment in the petition in the suit of C. Lazard & Co. vs. Henry
“No human being, not possessed of the power of divination, could, from this language” — the allegations of the plaintiffs’ affidavit — “infer that the averment covered a contingent liability of one of the partners of the firm, .in which the firm had no interest or concern and which they had no right to set up and no right to recover on.”
Again:
“There is not a line of evidence in the record to show that plaintiffs had any knowledge as to what the indefinite language of this petition covered, or was intended to cover.
“ There was nothing in the record itself, when the suit at bar was brought, which gave the faintest inkling of the fact that the firm of C. Lazard & Co. was trying to enforce the individual claim of one of its members.”
The foregoing are distinct and unqualified admissions, that the amount of the suretyship was included in that suit; that it was included therein by C. Lazard intentionally; but that it had been, by him, so carefully secreted from view that, in his opinion, “ no human being, nob possessed of the power of divination,” could have inferred from the “indefinite language of the petition” that “it covered a contingent liability of one of the partners ” of his firm.
After this suit was filed on the 5th of October, 1891, the contract of suretyship went to maturity on the 15bh; but on the 7th of October, previous to its maturity, the attorneys for the plaintiff wrote to C. Lazard a letter, demanding immediate payment, on the penalty of suit instanter..
In that letter they say:
“ You are aware that attachments far exceeding Henry Bloch & Bro.’s assets have been levied upon them, and we demand immediate payment or we shall institute suit promptly.”
But the plaintiffs did not then institute suit; they waited patiently for five weeks, and only filed suit on the 16th of November, 1891— attaching the same property that C. Lazard & Co. had attached previously.
In their petition in this suit all of the facts of the suit of C. Lazard & Co. vs. Henry Block & Bro. are circumstantially related, alleging that it was first in order and rank of privilege, and that all of the partnership as well as individual property of the defendants had been seized. Setting out fully C. Lazard’s contract of surety-ship as securing the defendant’s account, plaintiffs aver that in that suit “ C. Lazard recognized an indebtedness due to petitioners by said Henry Block & Bro., and as covered by said contract of ten thousand dollars, and that C. Lazard admitted his liability therefor as guaranty for said amount by including it in the aforesaid suit, No. 33,910, and swearing to its correctness.”
It thus appears that plaintiffs were well aware of the fact that this suretyship was incorporated in the former suit, notwithstanding C. Lazard’s attempted concealment of it, and that fact was made one of the grounds for their attachment, and on it they place reliance as establishing C. Lazard’s admission of liability.
They also rely upon Lazard’s admission of liability and request for an extension of time to pay.
On the 20 th of November, 1891, just five days after this suit was filed, plaintiffs in the suit of C. Lazard & Co. vs. Henry Block & Bro. obtained an order of court for the sale, pendente lite, of all defendant’s stock of merchandise, and in pursuance of that order same was subsequently sold and the proceeds thereof applied to plaintiffs’ claim by preference under their ranking attachment to the exclusion of all others.
On the 30th of November, 1891, ten days subsequent to said order of sale, that ease went to trial on plaintiffs’ motion to confirm a default, and C. Lazard was placed upon the stand and interrogated as a witness, and in the course of his cross-examination he was asked a great many questions in reference to the agreement he
To all these questions objection on objection was urged by the plaintiffs’ counsel, but they were all overruled by the court and the witness compelled to answer, the objections, evidence and reasons of the judge covering fully fifty pages of the transcript No. 11,103 of this court. But finally, the day having been consumed, and no decisive answer from C. Lazard obtained to these pertinent inquiries, the court adjourned for the day.
On the following morning plaintiffs’ counsel went into court and filed a very guarded motion, merely stating that “through an error of fact (they had) claimed from the defendant forty-one thousand five hundred and ninety-eight dollars and forty-three cents,” while “there was due 0. Lazard & Oo. only the sum of thirty-one thousand five hundred and ninety-eight dollars and forty-three cents; and that they desired to remit the difference of ten thousand dollars on that account.
The order of court followed the terms of the motion. Still entertaining the idea that they had effectually concealed this suretyship from view up to that time, counsel say in their brief:
“ No human being, not possessed of the power of divination, could from this language infer that the amount covered a contingent liability of one of the partners of the firm.”
And yet they complain very bitterly in their brief that our opinion places an imputation of untruth upon the testimony of Mr. Leake “ when he states that he would not have permitted this claim to have been included had he been informed at the time; and that as soon as Judge Lazarus returned, the error of law and fact was corrected by motion and affidavit.”
In treating of the $10,000 guaranty, the opinion of the court, says:
“ We infer from the record that it was not until the demand came from the plaintiffs, based on that paper, that it became known to counsel that the attachment suit embraced the guaranty. He then told (counsel?) the explanation of the $10,000, (which) should have been given before the attachment suit was instituted, clearly implying that if given, the item would not have included the guaranty.
“The sMt as to the $10,000, was thereupon discontinued on the
But I have shown from the record that the plaintiff’s demand was made on the 7th of October, 1891, and that this suit was not filed until the 16th of November, 1891. During the five weeks that intervened, no effort was made towards rectifying the alleged error, and counsel for C. Lazard & Co. did not appear in court for that purpose until the 1st of December, 1891.
Under this.state of facts I think the judicial averments made in the petition of C. Lazard & Co. vs. Henry Block & Bro. are undoubtedly binding on C. Lazard in this suit.
- In our opinion we said:
“ And this court recently said in Williams vs. Commission Co., 45 An. 1013: ‘ There are acts in judicial proceedings which bind the parties to them, even so far as third persons are concerned.’ ”
This principle has often been affirmed by this court.
In Morgan vs. Kennard, 23 An. 645, the court say: “ It is a general rule that parties are bound by their judicial admissions; and it is also true that admissions made in one suit may sometimes be used in another suit, although the suits be not the same.”
In Edson vs. Freret, 11 An. 710, the court said: “He is notto.be heard who alleges things contradictory of each other.”
In Gridley vs. Conner, 4 An. 416, the court said: “ We understand it to be a rule in the administration of justice that a man shall not be permitted to deny what he has solemnly acknowledged in a judicial proceeding; nor to shift his position at will to a contradictory one in relation to the subject matter of litigation, in order to prostrate and defeat the action of the law upon it ”
These principles- have been announced in frequent decisions of this court, and in various forms of expression, and notably in the following, viz.: Farrar vs. Stacy, 2 An. 210; Webster vs. Smith, 6 An. 719; Osborn vs. Segras, 29 An. 291; Fowler & Stillman vs. Stephens, 29 An. 353; Factors and Traders Insurance Co. vs. De Blanc, 31 An. 100; Byrne vs. Bank, 31 An. 81; Folger vs. Palmer, 35 An. 743.
On the foregoing established facts and this summary of adjudicated cases, I am of opinion that this question is set at rest.
This question has been answered in the affirmative by the majority of the court; but I feel constrained to dissent from the conclusions they have reached.