153 Ind. 189 | Ind. | 1899
On March 29/1884, John Snorf executed his promissory note to appellant in these words: “Niles,
Michigan, March 29, 1884. Five years from the 16th da.y of April, A. D. 1884, for value received, I promise to pay John B. Metzger twenty-eight hundred and thirty-five dollars, with interest at the rate of seven per cent, per annum, the interest on the whole sum to he paid annually on the 16th day of April of each year, a mortgage bearing even date herewith being collateral thereto. Signed, John Snorf.” On the same day Snorf and wife executed a mortgage to appellant on lands in the state of Michigan to secure said note. On March 31, 1884, appellant Metzger sold and transferred said note to one Daniel Ward, in consideration of $2,800 then paid by said Ward to him, and assigned said note to said Ward by the following agreement in writing indorsed thereon. “For value received I hereby sell and assign the within note to Daniel Ward of South Bend, Indiana, and guarantee the payment and collection of the same, and agree to pay all attorney’s fees, and do waive presentment for payment, protest and notice of protest and non-payment of the same, all
The complaint proceeds upon the theory that appellant’s contract indorsed on said note was a direct agreement to pay said note upon which he was liable at the suit of his own or any subsequent assignee. If this theory is correct the court did not err in overruling appellant’s demurrer to the complaint.
It is the settled rule in this State that, when the form of the contract is that of an original and' absolute undertaking to pay the debt of another, the liability of the promisor is that of surety; but when the agreement is that another shall pay in the first instance and the promisor only becames liable upon the default of the other, the contract is one of strict guaranty. “Usually the contract of the guarantor is to answer for the default of his principal, if by the use of due diligence a loss results from such default, while the surety is responsible at once upon his direct engagement to pay.” Furst & Bradley Mfg. Co. v. Black, 111 Ind. 308, 313; Ward v. Wilson, 100 Ind. 52, 55, 56, 50 Am. Rep. 763; LaRose v. Bank, 102 Ind. 332, 335, 336.
It has been uniformly held in this State that where any person upon a sufficient consideration, by a contract in writing, guarantees the payment of the debt of another, evi
In Burnham v. Gallentine, supra, the agreement entered on the back of the note by the payee was in the following words: “I guarantee the payment of this note, and costs, if any are made on it,” and it was held to be in substance and legal effect a promissory note and the person executing it' an absolute promisor, unconditionally bound to pay the note without regard to the solvency or insolvency of the maker thereof.
In Sample v. Martin, supra, the agreement indorsed on the note by persons, neither one being the payee, was, “We guarantee payment,” and it was held that the persons executing the same were unconditionally liable, and’ were not discharged by the failure to use diligence to collect the note of the maker while he was solvent and able to pay.
In Studabaker v. Cody, supra, the note was indorsed by the payee as follows, “For value received I assign this note
In Cole v. Merchants Bank, supra, two persons, not the payees of the note, indorsed on the back thereof the following, “We jointly or severally, for value received, hereby guarantee the prompt payment of the within note.” Said note was afterwards sold and assigned by the payee to said Merchants Bank, and the assignee brought an action, on said agreement and it was held that said contract passed to said bank and it was entitled to recover thereon upon the doctrine declared in Sample v. Martin, supra, which was approved.
In Frash v. Polk, supra, William Erash assigned to o.ne Polk a judgment, and at the same time he and one John Erash executed an agreement which, omitting that part which described the judgment, assigned it as follows: “We hereby guarantee that said judgment, bearing ten per cent, interest, shall be paid to said Robert Polk on or before-December 25, 1875, and in case it is not paid by that time we guarantee the payment of three per cent, additional interest from said date (Dec. 25, 1875) until said judgment is. paid,” and it was held that said contract was not a, collateral guaranty, but that it was a direct and absolute contract of the persons executing it, and that they were severally liable thereon.
In Kline v. Raymond, supra, the writing sued on read: “I hereby guarantee the payment of six hundred dollars to Raymond, Lowe & Co., * * * for goods bought April 3, 1872, by G. H. Baxter, Muncie, Ind., the terms being for net goods sixty days, and time goods four months. This guaranty shall cover any balance in account, not exceeding the amount above named. Invoice not made out, and may
In Fursl & Bradley Mfg. Co. v. Black, supra, S. M. Black entered into a contract with one Prier, upon the back of which was written an agreement, guaranteeing the fulfilment of said agreement by said Black, and it further provided: “I further guarantee to the said H. J. Prier the payment of all notes that may be taken by him in part or full payment of all sums for which he may become liable under this contract, including in the above guarantee the payment of all notes made by any other person whatever that may be transferred to said H. J. Prier by S. M. Black. Payable without relief from valuation or appraisement laws.” It was held in an action on said contract that the part thereof that guaranteed the fulfilment on the part of Black, of his contract with Prier, was an indirect or collateral guaranty, because the persons executing the same only guaranteed that Black would fulfil it, and they did not assume or agree to do so themselves. The court however held that the latter part of the agreement which guarantees the payment of all notes taken by Prier, under the agreement between him. and Black, was a direct, and absolute undertaking to pay all such notes upon which they were absolutely and unconditionally liable.
It is evident that the agreement sued on is, under the rule established in this State, a direct and absolute undertaking to pay said note, and that appellant’s liability thereon is absolute and unconditional, and that neither appellees nor their assignors owed appellant any duty to collect or attempt to collect the same from the maker of the note, and that their laches, if any, in this respect, did not discharge appellant from his liability to pay said note, and the indorsement of said note to appellees passed to them the agreement of appellant sued upon. Cole v. Merchants Bank, supra; Studabaker v. Cody, supra. The word “collection” in said
The fourth and fifth paragraphs of answer were. drawn upon the theory that appellant’s agreement was a strict guaranty, and that he did not undertake thereby to pay the note. It follows from what we have already said, that the court correctly held said paragraphs of answer insufficient.
Appellant says that “the third paragraph of answer sets up the same facts as the second paragraph of answer, with the additional facts” setting forth the same. The sufficiency of the additional facts stated depends upon the theory of appellant that the agreement sued upon is one of strict guaranty, and therefore added no strength to said third paragraph, being mere surplusage. As said third paragraph without said additional facts was the same as the second, the error, if any, in sustaining the demurrer thereto was harmless, for the reason that appellant could make the same de
It is next insisted that the court erred in overruling appellant’s motion for a new trial. Appellant insists that the issue of fact made by the general denial to the second paragraph of answer should, under the evidence, have been found in his favor. Said second paragraph of answer, disregarding surplusage, conclusions and other unnecessary and immaterial allegations, avers in substance that,' “on March 31, 1888, appellant and said Ward, who was then the holder of said note, entered into the following agreement: ‘Know all men by these presents, that I, John B. Metzger, of St. Joseph county, State of Indiana, for value received, the receipt whereof is hereby acknowledged, have sold, assigned,, transferred and set over, and by these presents do sell, assign, transfer and set over unto Daniel Ward, of St. Joseph county, State of Indiana, his executor, administrator or assigns, to his and their own proper use and benefit, a certain indenture or mortgage bearing date March 28, A. D. 1884, and recorded March 31, A. D. 1884, in Liber 24, Mortgages, pages 608 of the records of Berrien county and state of Michigan in the registry office thereof, which mortgage was executed and delivered by John Snorf and Teresa Snorf, his wife, to the undersigned, John B. Metzger, together with the promissory note and the debt and interest secured by said mortgage; and I do hereby give the said Daniel Ward, his executor, administrators and assigns the full power and authority, for his or their own use and benefit, or at his or their own cost, to ask, demand, collect, receive, compound and give acquittance for the same or any part thereof, and in my name or in -his own name or otherwise prosecute and. withdraw any suit, or proceeding in law or in equity therefor. The note secured by said mortgage is of even date herewith, and for the principal sum of $2,835, bearing interest at seven per
There was no evidence given by any one that said Ward agreed to receive said assignment in lieu or discharge of appellant’s undertaking to pay said note, or that he would release appellant therefrom, or that the same should be canceled in consideration of said assignment. Unless therefore the mere execution by appellant of said written assignment set forth in the second paragraph of answer, and its acceptance by Ward, released, discharged, or canceled appellant’s undertaking to pay said note, appellees were entitled to recover thereon, and the motion for a new trial was correctly overruled.
The written assignment set up in said paragraph in no way refers to or modifies appellant’s written undertaking to pay the note, nor was said undertaking, by the mere acceptance of said assignment, merged therein. There is nothing inconsistent in the two writings, and they may both stand without in any way interfering with each other. The written assignment did not require Ward.to sue on the note and mortgage, it only gave him the right to do so, a right which he already had. It is evident that the mere execution and acceptance of the assignment in March, 1888, did not cancel, release, or in any way prevent the enforcement of appellant’s undertaking to pay said note.
Finding no available error in the record the judgment is affirmed.