Newell v. Fowler

By the Court,. Welles, J. The facts established by the pleadings, in connection with the evidence, show that the premises embraced in the mortgage were, before it was executed, and have ever since continued, incumbered of record to an amount exceeding their value, and that at some time between the execution of the bond and mortgage by Kent and the commencement of the actionj Kent had died insolvent, and leaving no property. Any legal proceedings, therefore, to collect the money by foreclosure of the mortgage at any time after it was given, or against Kent or his estate at the time of the commencement of the action, would probably have been ineffectual. However this may have been, it was incumbent upon the plaintiffs to have exhausted all the remedies afforded by law, to collect the money secured by the bond and mortgage, as well against Kent or his estate, upon the bond, as by foreclosure of the mortgage, before he had a right to resort to the contract of guaranty, which was, in legal effect, an undertaking that the money could be collected by due course of law. (Burt v. Horner, 5 Barb. 501. Taylor v. Bullen, 6 Cowen, 624. Van Derveer v. Wright, 6 Barb. 547. Loveland v. Shepard; 2 Hill, 139. Moakley v. Riggs, 19 John. 69.) There are numerous other authorities to the same effect. In some of those just referred to, the contract of guaranty was that the debt was collectable by due process of law, as in Moakley v. Riggs. In Van Derveer v. Wright, the language was, “ I guaranty the collectability of the within note.” In Burt v. Horner., it was, “ we guaranty the collection of the within note and in Loveland v. Shepard, the language was similar. In all the cases where the guaranty was of collection, without the words by due process of law, or any equivalent words, the construction has uniformly been the same, and that by a guaranty of collection was intended—col-' lection by due process of law. In this case, if it needed any aid to bring the guaranty within the above rule of interpreta [632] tion, it is found in the language employed, which is not only a guaranty of collection, &c., but the words “ with costs,” are added; as in Taylor v. Bullen, (supra,) in which Savage, Ch. J., says “ the guaranty supposes that a resort to legal measures might become necessary, and the defendants engage to pay costs on any suits legally commenced.” It was a condition precedent to any liability of the guarantor, that the other party to the contract of guaranty should, within a reasonable time, institute legal proceedings upon the securities assigned, and prosecute them with diligence to a consummation. It is not protended that any thing of this kind has ever been done. Nothing will excuse the party holding the guaranty from the performance of this condition, but the act of the guarantor himself. It was a part of the contract, and it will not answer for the party to say it would have been of no use to prosecute. Conditions precedent must be strictly performed. In Wood v. Worseley, (6 T. R. 710,) which was an action on a policy against fire, one of the conditions was to produce a certificate of the minister and church wardens, of certain facts. The certificate was not procured; though other evidence of the facts was; and the minister, &c. refused, without cause, to give the certificate. The court of common pleas held this tantamount to a production of the certificate. But the judgment was reversed in the king’s bench, after two arguments; that court holding the production of the certificate a condition precedent, and that it was immaterial that the minister wrongfully refused. It was urged by the counsel for the insured, that the condition was performed, cy pres ; but the court held that nothing could be substituted in place of a strict performance of the condition, according to the contract. The question of diligence or laches on the part of the plaintiffs or their assignors is not in the case, for the reason that no attempt has been made at any time to collect the money from the principal debtor or his estate, or by means of the mortgage. To meet this difficulty the plaintiffs contend that they have proved a waiver by the defendant’s testator. The evidence touching a waiver, relates entirely to the mortgage. There was [633] not evidence sufficient to be submitted to the jury of any waiver excepting what related to foreclosing the mortgage. It does not appear that the testator waived proceedings' against Kent, or his estate, on the bond. That was as much a part of the condition, as was the proceeding to foreclose the mortgage. It nowhere appears when Kent died, or when he became insolvent, if that were material. It is sufficient that the contract imposed upon Stark and his assignees the burthen of exhausting by legal proceedings every remedy which the bond and mortgage gave them, before the guarantor’s liability should become fixed. Monroe General Term, March 2, 1857. In my opinion the plaintiffs were properly nonsuited, and the motion for a new trial should be denied with costs. Ordered accordingly. T. R. Strong, Welles and Smith, Justices.]