Porter v. Carpenter

Fostbu, J. One of the conditions, expressed in the paper, upon which the defendant was to pay his subscription, was, that Fairbanks, Buss, Adams, and Humphrey, before the commencement of buildings, should furnish proper guarantees for the acceptance and fulfilment of the lease to be made to them ; and the question tried was whether they did so. It is very plain that the word guarantees is used here as the equivalent of guaranties, that is, promises, warranties, securities outside the obligors themselves, and not as the correlative of guarantor, which would make the stipulation senseless. What Fairbanks, Buss, Adams, and Humphrey did in the way of furnishing guarantees, or guaranties, was (1) to procure the signature of White to their obligation, and (2) to enter into an agreement for the pledge of their stock in the contemplated corporation as security for its performance. Doubtless the trustees could enforce performance of this agreement when the corporation came to be formed, and the stock issued to the signers of the obligation in payment for their land ; and so we think it must be held that “ guarantees ” were furnished (whether “ proper,” or not, is another question), and that the defendant’s request for instructions on this point, as well as his objection to evidence concerning the pledge of stock, was properly overruled. On the trial of the question whether the guarantees furnished *654 were “ proper,” the plaintiffs were permitted to show the pecuniary situation of Fairbanks and his associates May 29, 1871. In this we do not see any error. What would be proper, that is, sufficient, collateral security for the performance of his contract obligation by a man of large estate, might, and ordinarily would, fall far short of being proper security for the performance of a similar and equal obligation by a bankrupt. It was •& matter upon which the trustees were bound to exercise a sound and honest judgment. No man of practical sense, whether acting for himself or-for others, could shut his eyes to the pecuniary condition of the principal in determining, the amount and character of guaranties proper to be required for insuring performance of his undertaking. The testimony of the plaintiff, Porter, as to what he understood to be the credit, standing, and means of Fairbanks, Buss, Adams, and Humphrey at the time he accepted their obligation, as well as his statement of what White told him concerning his own affairs, was admitted to show whether the guaranties taken were such' as prudent men would take in the management of their own affairs; and the court instructed the jury, in substance, that this would be a fair measure for determining whether the guaranties taken were proper. This seems to be reasonable, and we think the exceptions based on the idea that something more was required must be overruled. The opinion of the defendant as to how much Fairbanks, Buss, Adams, and Humphrey were worth May 29, 1871, was immaterial. His conduct was not in question, as in the case of Porter, and the evidence was properly excluded. Nor was the amount expended for extraordinary repairs in January, 1873, a matter which the jury could fairly be permitted to consider on the question of what would be proper guaranties, because the paper does not fairly import that extraordinary occasions were to be foreseen and provided against. It may be doubtful whether the instruction, that, if the pecuniary condition of Fairbanks, Buss, Adams, and Humphrey was such as to make their names sufficient security, it was not necessary that any collateral security should be furnished by them, can be sustained. Perhaps, by a fair interpretation, the guarantees called for by the paper mean something in the way of promises or securities outside the names of the principal obligors. But the special finding of the jury under the other instructions given seems to make this somewhat too narrow statement immaterial. The substance is, that the jury found, under instructions to which there is no valid objection, that, considering the pecuniary condition of Fairbanks, Buss, Adams, and Humphrey, their agreement for the pledge of stock, and the signing of their obligation by White, the guarantees were proper. This, we think, is sufficient, and that there must be Judgment on the verdict.