47 How. Pr. 180 | N.Y. Sup. Ct. | 1873
This was an action on a contract of’guaranty indorsed on a promissory note in the following words:
. <£ For value received, I guarantee the payment and collection of the within note, with costs, if any made.
(Signed) WILLIAM THAYER.”
-1 held, at the circuit, that this was a guaranty of payment as well as of collection, and therefore denied a motion for a nonsuit made by defendant at the close of the plaintiff’s case, no evidence being given of proceedings to collect of the maker of the note. The defendant’s exception to the ruling denying the motion for a nonsuit presents the only question in the case. Counsel for defendant now cite the case of Baoater agt. Smack (17 How., 183), where Roosevelt, J., at special term, on demurrer, held a similar guaranty of a bond and mortgage, omitting only the words “ with costs, if any made,” to be a guaranty of collection only, and sustained the demurrer to a complaint which did not allege proceedings previously had against the mortgagor. With great respect for the opinion of the learned judge who. thus decided, I am unable to concur with him in his construction of the contract.
He says, “ to construe it as a guaranty of payment renders the word £ collection ’ a mere nullity; whereas to construe it as a guaranty of collection gives some force to all parts of the sentence.”
I concede that to construe it as a guaranty of payment’ alone, renders the word “collection” superfluous; and it seems equally clear that to construe it as a guaranty of collection alone has the same effect in regard to the word “ payment; ” whereas to construe it as a guaranty both of payment and. collection, gives force to all the language employed
Upon a guaranty of collection only the holder must proceed in the first instance against the ranker, but, if he fails to collect of him, has his action against the guarantor, both for the debt and for the costs of the proceedings against the maker.
Upon a guaranty of payment only, the holder may proceed in the first instance against the maker; but if he does so, and subjects himself to costs, he cannot afterwards recover those costs of the guarantor, because he had his action in the first instance against the guarantor, and need not have incurred costs in an action against the maker.
But upon a guaranty both of payment and collection the holder has his election to proceed in the first instance either against the maker or against the guarantor, and if he does proceed against the former, and fails to collect, he has his remedy against the latter, as well for the costs of the former action as for the debt.
Certainly, if it had been the intention of the parties to this contract to give the holder such an election and such a remedy, no form of words could have been selected more apt and effective to express such intention than the form actually employed, viz.: “ I guarantee the payment and collection of the within note, with costs, if any made.”
It needs no argument to show that such a choice of remedy, with indemnity for costs to the extent of the guarantor’s responsibility, might be of substantial advantage to the holder of the contract in many cases. For the reasons stated I am still of opinion that the contract was properly construed at the circuit.
The motion for a new trial must therefore be denied.
At the general term, fourth department, April, 1874, the order of the special term was affirmed, on the grounds stated in opinion of justice Dwight, the court adopting Ms opinion.
Justices Mullin, E. D. Smith and Gilbert.