157 N.Y.S. 422 | N.Y. App. Div. | 1916
The complaint herein set forth that on December 12, 1913, the Brightwood Motor Manufacturing Company, for a valuable
Exhibit “A” annexed to the complaint is pleaded as follows:
“In consideration of the loan by the Farmers’ Loan and Trust Company of New York to the Brightwood Motor Manufacturing Company, a corporation organized and existing under the Laws of the State of New York, the manufacturers of the Orson automobile, and in further consideration of One Dollar ($1.00) to me in hand paid by the said Farmers’ Loan and Trust Company of New York, and other good and valuable considerations, the receipt whereof is hereby acknowledged, I, the undersigned, do hereby guarantee to the said Farmers’ Loan and Trust Company of New York to the extent of Twenty-five Hundred Dollars ($2500), the punctual payment at maturity of a certain promissory note, dated December 12, 1913, for the principal sum of One Hundred and Twenty-five Thousand Dol-
*416 lars ($125,000) with interest at the rate of 6 per cent, per annum, to be made, executed and delivered by the said Bright-wood Motor Manufacturing Company to the said Farmers’ Loan and Trust Company of New York, together with all legal and other expenses of collection, and I hereby expressly waive presentment for payment, notice of presentment and of nonpayment, protest and notice of protest of said note, and consent that the time for the payment thereof may be extended without notice of or further consent from me.
“Dated, New York, June 11, 1913.
“(Signed) WM. H. SEAICH.”
It was further averred that the trust company accepted the note of the manufacturing company and advanced money thereon in reliance upon the said guaranty of defendant; that when the note became payable it was duly presented for payment, which was refused, and that there is still due thereon a sum exceeding $7,500,' no part of which has been paid to said trust company or to plaintiff, its assignee; that notice of the failure to pay said note was duly given to defendant and demand made upon him “ for the payment of the said sum of $2,500 according to the agreement of the said defendant, above mentioned,” but no part thereof has been paid; that the trust company has duly assigned its cause of action against defend ant to the plaintiff.
The answer of the defendant, among other things, denied the allegations of paragraph “ fifth ” of the complaint heretofore quoted. Upon the trial plaintiff produced and offered in evidence the instrument upon which it relied to establish its cause of action. While the body of the paper was the same as that pleaded, it was not signed by William H. Seaich alone but by six individuals in the following order: H. B. Winthrop, Charles G-. Smith, E. Townsend Erwin, William H. Seaich, A. W. Krech and Lyman Bhodes. Defendant objected to its receipt as incompetent, immaterial and irrelevant under the pleadings, but he was overruled and excepted. Plaintiff offered proof that the manufacturing company’s note had been paid in part and that at the time of the assignment to plaintiff $7,500 remained unpaid thereon, “represented by three unpaid
“ $80 Altona, Oct. 18, 1878.
“For value received, I promise to pay Baker & Wood eighty dollars at Altona express office, with use, January 1, 1880.
“E. W. WOOD. “SMITH WOOD.”
It was held that this note was joint and several. A judgment having been obtained by the payee against both makers, although after service on one only, and one of the makers having turned over to the judgment creditors a mare in satisfaction of the judgment against him, with an agreement that it should be sold and the proceeds applied upon the note and the judgment satisfied pro tanto as to the other maker, it was held that the judgment was satisfied the instant the mare was transferred, and no further liability remained against either maker, for where a debt is joint and several one debtor may be released and the other held, but if the debt is satisfied by either, nothing remains for either to pay. Upon the question of the effect of satisfaction by one of two bound jointly and severally, that case was cited with approval in American Guild v. Damon (186 N. Y. 366). In Ely v. Clute (19 Hun, 35) the note sued on was in the following form:
“ $270. Stockton, March 14, 1875.
“ One day after date I promise to pay Lorenzo Ely, or bearer, two hundred and seventy dollars at the post office in Stockton. Value received with use.
“THOMAS W. CLUTE.
“ J. B. CLUTE.”
“For value received, I promise to pay C. W. Nason, or bearer, sixty-five dollars, in six months from date, and use, at my house.
“(Signed) W. COLBY.
“CHARLES W. NASON.”
Nason offered on the trial to prove that he had received the note signed by Colby only, and had subsequently signed his name thereto, and delivered it to plaintiff in part payment for a horse. It was held that, as to the bearer of the note, he was a joint and several contractor with Colby. In Brownell v. Winnie (29 N. Y. 400) that case was cited and approved. That a note reading, “I promise to pay,” but signed by two or more, is the joint and several obligation of the signers, is laid down in Story on Promissory Notes (6th ed. §§ 58, 59); Daniel on Negotiable Instruments (6th ed. § 94, citing cases from other jurisdictions); 7 Cyc. 656. It is now the settled law of this State under the Negotiable Instruments Law (Consol. Laws, chap. 38; Laws of 1909, chap. 43), whereof section 36, subdivision 7, provides: “Where an instrument containing the words ‘ I promise to pay ’ is signed by two or more persons, they are deemed to he jointly and severally liable thereon.”
.The rule is the same when applied to the construction of contracts in general, including those of guaranty or suretyship. In Parsons on Contracts (Vol. 1 [9th ed.], p. 11) it is said that “ Wherever an obligation is undertaken by two or more, or a right given to two or more, it is the general presumption of law that it is a joint obligation or right. Words of express joinder are not necessary for this purpose; but on the other hand, there should he words of severance, in order to produce a several responsibility or a several right.” The foot note then states that “If an instrument, worded in the singular, is executed by several, the obligation is a joint and several one; and those who thus execute it may be sued either separately or together,”
“ In consideration of one dollar in hand to me paid by Martin M. Garner, I hereby covenant and agree to become surety for the faithful performance of said Garner’s covenants as expressed in the above said lease. Sealed with my seal and dated this 3d day of April, 1845.
“ JOHN P. VAN SLYCK, [l. s.]
“ CHRISTOPHER H. GARNER.
“Witness S. V. Cady.”
It was held that the obligation of the defendants Van Slyck and Garner was clearly a joint and several one. That case is regarded as a leading one upon the question, and was cited by the referee in his report, approved by the court and printed with the decision in State Bank of Pike v. Brown (96 App. Div. 441; affd., 184 N. Y. 517). The bond in that case read: “Know all men by these presents, That I, Earle S. White, * * * Henry K. White * * * W. O. Leland * * * S. N. Wood and George M. Brown, * * * am held and firmly bound unto The State Bank of Pike N. Y., in the sum of twenty thousand dollars * * * for which payment I bind myself, my heirs, executors and administrators. ” Defendants pleaded that this was on a joint bond. The referee said: “If the words are ‘ I promise to pay,’ and there are many promisors, it is the several promise of each and the joint promise of all.” (Citing Van Alstyne v. Van Slyck, Partridge v. Colby and Ely v. Clute, supra.) “The bond in question then was the several bond of each and the joint bond of all, i. e., a joint and several obligation, and the plaintiff can maintain an action thereon against all the makers jointly or against one or more of them severally.” (p. 448.) In Steams on Suretyship (2d ed. p. 92) it is said, speaking of the contract of guaranty: “Where the form of the contract is singular, but executed by two or more persons, it expresses the intent of the obligors in the majority of cases to hold such promise to be joint and several, and such is the rule.” Plaintiff’s theory of the instrument in
The judgment and order appealed from will be reversed and a new trial ordered, with costs to appellant to abide the event.
Clarke, P. J., McLaughlin and Laughlin, JJ., concurred; Smith, J., dissented.
Judgment and order reversed, new trial 'ordered, costs to appellant to abide event. Order to be settled on notice.