Bigelow v. Benton

By the Court, Parker, J. The contract on which this suit is brought was clearly a contract of guaranty. It was so declared upon its face, and such is its import. It was made Avith reference to a negotiation then pending betiveen the plaintiffs and Durkee. The defendant prescribed the precise terms and conditions of his guaranty, and no rule is better settled than that the terms of the guaranty must be strictly complied with, or the guarantor will not be bound. It is a claim strictissimi juris. (Miller v. Stewart, 9 Wheat. 680. Wright v. Johnson, 8 Wend. 512. Walsh v. Bailie, 10 John. 180. Birckhead v. Brown, 5 Hill, 634. Hunt v. Smith, 17 Wend. 179. Dobbin v. Bradley, Id. 422. Walrath v. Thompson, 6 Hill, 540.) The defendant guarantied the shipment and delivery to the plaintiffs at Troy, by Durkee, of a barrel of superfine flour for every four and a half bushels (two hundred and seventy pounds) of good wheat he received from them; and a barrel of corn meal for every two hundred and forty pounds of Indian corn received from them. To make this contract of guaranty available, the agreement between the plaintiffs and Durkee should have corresponded precisely with it. But it differed essentially. It bound Durkee to deliver a barrel of flour, for a less quantity of. wheat than was required by the contract of guaranty, and it required that the corn meal delivered should be “ kiln dried,” which was not contemplated by the guaranty. The guaranty declared that it was given upon the express condition that the wheat and corn should not be sold by the plaintiffs to Durkee, but that he was to receive and manufacture« them into flour and meal, on the plaintiffs’ account. The title [129] to the grain was to remain in the plaintiffs, and the guarantor was to be responsible only for the faithful return by Durkee of the flour, in the proportions and according to the terms of the guaranty. (It was manifestly important to the guarantor that his principal should be subjected to no hazard.! Yet, by the terms of the subsequent agreement between the plaintiffs and Durkee, the latter was subject to the entire risk of the market. His compensation was made to depend, not on retaining the share of grain allowed by the guaranty for his toll, but on the fluctuations in the market value. By the terms of the agreement, the plaintiffs were to deduct from the gross sales of flour and meal forwarded by Durkee, the commissions for purchasing the wheat and corn, the commissions for .selling the flour and meal, and the amount of the purchase money paid by them for the wheat and corn, and all cooperage, and other just and customary charges, and the balance, after such deductions, was to be paid over by the plaintiffs to Durkee for his services, expenses, and the use of the mill in manufacturing the flour and meal. Durkee was thus made the owner of the grain manufactured, at least so far as the consequences to himself were concerned. If this provision was not an open violation of the contract of guaranty, it was certainly a palpable evasion of it. In Wright v. Johnson, (8 Wend. 512,) the defendant engaged to be accountable to any one who would advance to one Stickney any sum less than $200 at 9 or 12 months. Stickney delivered the guaranty to a creditor, in payment of a debt then due, for goods sold, amounting to $102, and in consideration of the engagement of the creditor to furnish him more goods, and to advance cash, which advances were subsequently made, so that the whole indebtedness of Stickney exceeded $200. It was held that the appropriation of the guaranty to the discharge of a previous debt, and the delivery of goods instead of money, were a departure from the terms of the guaranty, and that the guarantor was not liable. In Hunt v. Smith, (17 Wend. 179,) the defendant drew an order on the plaintiff, directing him to furnish goods out of his [130] store to one Putnam, to the amount of seventy dollars, engaging to be accountable for such sum, and requesting the amount of the bill to be sent to him. The plaintiff furnished the goods to Putnam, to the amount of $102,81, and took his note at 30 days. It was held that the giving of credit discharged the guarantor from liability. Dobbin et al. v. Bradley, (17 Wend. 422,) shows still more distinctly with what strictness the transaction must conform to the guaranty. The defendant engaged to guaranty the payment of the paper of another, made payable at. a particular bank. It was held he was not liable on a note drawn by such party, in which no place of payment was specified, though the note had been deposited for collection in the bank specified in the guaranty, previous to its maturity, and notice thereof given to the guarantor. Bronson, J. said, “ The question is not whether the conditions by which he has thought proper to qualify his liability were either reasonable or unreasonable; nor whether they could in any way prove beneficial to the defendant. He had a right to judge of that matter for himself, and we have no authority to review his judgment.” In Walrath v. Thompson, (6 Hill, 540,) Johnson, wishing to purchase goods from the plaintiff, on credit, procured a letter of guaranty from the defendant, containing the following clause: “ Mr. Johnson thought it would be an accommodation to him to have you wait (for payment) until the 1st of January, 1840: if that will answer your purpose, I will be surety for the amount, to be paid at that time.” The plaintiff sold Johnson the goods, but took his note for the goods, payable on the 25th of December, 1839. Johnson was not called on, however, to pay the note when due, and after January 1st, 1840, the plaintiff sued to enforce the guaranty. It was held, that inasmuch as the plaintiff had not agreed to wait for payment until the day proposed by the guaranty, the defendant was not liable. These cases show how strict must be the compliance with the conditions of the guaranty, to enable the creditor to enforce it against the guarantor; In my opinion, a rule of even much less [131] strictness would ■ exonerate the defendant from liability in the case at bar. [Albany General Term, September 6, 1852. Parker, Wright and Harris, Justices.] The judgment rendered at the circuit should be affirmed.