137 N.Y. 525 | NY | 1893
Plaintiff and the defendant Eldredge had been copartners, and, upon a dissolution of the copartnership, Eldredge took over the stock of goods and fixtures, and plaintiff took a transfer of certain notes, accounts and claims belonging to the firm. A bond was given to plaintiff, upon which Eldredge was principal and the defendant Seymour was surety, and which was conditioned as follows:
"The condition of this obligation is such, that if the above bounden, Loren D. Eldredge, his heirs, executors or administrators shall and do well and truly pay or cause to be paid unto the above-named Murray N. Ralph, his certain attorney, executors, administrators or assigns, one-half of the amount of notes, accounts and claims of the late firm of Eldredge Ralph, assigned by the said Eldredge to Murray N. Ralph, that shall prove to be uncollectible, if any such there be, with interest in the amount thereof from the date hereof without fraud or delay, then the preceding obligation to be void, otherwise to remain in full force and virtue."
This action was upon the bond, to recover one-half of what plaintiff alleged had proved uncollectible of the choses in action transferred to him. Upon the trial, the referee excluded evidence offered by the plaintiff to show the financial condition of the various debtors, and that they were not, and had not been since the assignment of the claims, of financial ability to pay the demands upon them. He held that no right of action accrued to the plaintiff against the defendants before the prosecution of the claims to judgment, and the issue and return of executions unsatisfied. This view has been sustained by the General Term, and the bond was there construed as a strict guaranty of collection. This construction is based upon the meaning attached to the words "prove uncollectible," which seemed to the court to contemplate some legal *528 process to determine that a claim was uncollectible. We think that the rule of construction has been too strictly applied in this case. In such an instrument its construction and its force must depend upon the apparent and reasonable intentions of the parties to it, and they, in this case, do not seem to require that the plaintiff should exhaust all his legal remedies against the various debtors. The absence of the word "guaranty" has some significance, and taken with the circumstances under which the obligation was entered into, we think it was not the intention of the obligors that the plaintiff should go to the expense of reducing all these claims, varying in amounts from insignificant to large sums, to judgment. The purpose was that the plaintiff should receive as a consideration for the transfer of his interest in the stock in trade to Eldredge the outstanding claims due to the firm, and if he found any which were uncollectible he was to be paid one-half of their amount by his former partner. The obligation was not a guaranty of the debt; it was against the debts turning out to be valueless. It cannot reasonably be inferred that the arrangement of the parties upon dissolution and settlement contemplated the assumption by plaintiff of a series of litigations, with all their attendant expenses. The obligation does not cover, by its terms, anything but the half of the claims assigned which should be ascertained to be uncollectible, and to construe it as it has been construed below would be to import into it the intention that it was to work as the ordinary guaranty of the collection of a debt. Neither the language nor the circumstances warrant a construction which would work so harshly and inequitably upon the plaintiff's rights.
We think that the judgment should be reversed and a new trial ordered, with costs to abide the event.
All concur.
Judgment reversed. *529