Norris v. Spencer

[326] The opinion of the Court was drawn up by Shepley J. Whether the contract of one, who engages to be responsible for another, is to be regarded as an original and joint, or as a collateral one, must depend upon the intention of the parties, to be ascertained from the nature of it and the language used. This contract, being for labor to be performed, and containing the terms of payment, was signed by the plaintiff and Spencer, in whose ability to pay there was not so much confidence as to induce the plaintiff to dispense with his obtaining security. It having been prepared and signed by these parties, a third person, who designed to become jointly responsible, could not make that intention known by simply signing his name without any declaration of the object. This might have been accomplished by signing his name and adding the words surety for Spencer. And this, it is admitted, would have made him jointly responsible. Instead of this he describes the place of his residence and says,'he “agrees to be security to the said Norris for the said Spencer in the above contract.” The only important words are I agree to be security in the above contract. This contract being without a date and there being no proof to the contrary, is presumed to have been made at the time of the original one; and they become parts of the same -transaction. He was to be security in the contract, which is equivalent to becoming a party to it; and without any intimation, that he was to be a favored party. There is nothing indicating, that he was to pay only in case Spencer did not. And this appears to have been a consideration of importance in determining whether the contract was collateral in the case of Jones v. Cooper, Cowp. 227. It is said that a surety is one, who is bound with and for another; while the word security only implies, that one is bound for another, and that he enters into a collateral undertaking, it being equivalent to the word guaranty ; and that this Court has so declared in the case of True v. Harding, 3 Fairf. 193. The contract in that case being upon the back of it, was “ to secure the within note” out of a particular fund, and therefore admitting of no doubt, that it was collateral. The court observe, that “ to secure, is a term equally as strong as if he had engaged to guaranty and must be understood to have the same meaning.” That is, it must be so understood, as used in that contract, not that it usually has the same meaning. It has [327] not by usage acquired a legal and technical meaning like the word guaranty. To become security in a contract is to become a party to it in the character of a surety unless there be something indicating a different intention. In the case of Newbury v. Armstrong, 6 Bing. 201, the contract was “ to be security” for another and “ in case of any default, to make the same good,” and there was no contract by the one for whom he became security, and the terms also clearly exhibit its collateral character. This is more like the case of Hunt v. Adams, where the contract having been made at the time the note was signed, and containing nothing indicating that it was intended to be collateral, it was held to be a joint and several promise. Exceptions overruled.