Gates v. McKee

Denio, J. If this were the first time that an instrument of this character had been before a court, and we were now called upon to construe it without the light of adjudged cases, the first inquiry would naturally be whether the limit of $500 related to the amount of purchases to be made by M. E. McKee or to the defendant’s ultimate liability; and I think it clearly qualifies the responsibility of the defendant and not the amount of M: E. McKee’s future transaction with the plaintiff. It is as if he had said “ I will be responsible to the amount of $500 for what stock M. E. McKee has had or may want hereafter,” &c. I also think that the words “ what stock ” in their relation to future purchases, have the force of whatever stock or whatever, amount of stock he may want hereafter; and the word “ stock” alone denotes the supply of materials for the business of the party spoken of. The word “ hereafter ” seems to be used in an indefinite sense. It is not at any particular time in the future, but as if it were writien at any time hereafter. The words “ may want” are significant as to the character of the future dealings in contemplation, and they mean the same thing as may need or require or may have occasion for. M. E. McKee was a shoemaker, and the plaintiff was a leather manufacturer; and reading of the paper as relating to their respective occupations and giving the language the interpretation which I have suggested and leaving out what is said of past indebtedness as immaterial, the following paraphrase would appear to me to express its true meaning: “ Sir, 1 will be responsible to the amount of five hundred dollars for whatever amount of materials in his line, M. E. McKee may, at any time hereafter require.” This is not a refined or artifial interpretciation, but it is what the plaintiff or any other person to whom such a paper might be addressed, would naturally, and in my opinion, unavoidably understand from it. If this is the meaning which the paper naturally conveys, it is the sense which the court is bound to apply to it. The cases are not entirely harmonious as to the prin [235] tiples of construction which ought to govern in this class of cases, but the weight of authority is altogether in favor of construing guarantees by rules at least as favorable to the creditor as those which courts apply to other written contracts, irrespective of the consideration that the guarantor is a surety. In Mason v. Pritchard (12 East., 227), the court said the wcrds were to be taken as strongly against the party giving the guarantee as the sense of them would admit. The same remark is found in the opinion of the supreme court of the United States in Drummond v. Prestman (12 Wheat., 515), which was the case of a guarantee. In Douglass v. Reynolds (7 Peters, 113, 122), Judge Story said, speaking of guarantees, “ as these instruments are of extensive use in the commercial world, upon the faith of which large credits and advances are made, care should be taken to hold the party bound to the full extent of what appears to be his engagement.” In Lawrence v. McCalmont (2 Howard, 426), the attention of the same learned judge was directed particularly to this question of construction. After remarking that a question had been made on the argument whether the letters of guarantee under consideration should receive a strict or'a liberal construction, he said : “ We have no difficulty whatsoever in saying that instruments of this sort ought to receive a liberal interpretation. By a liberal interpretation we do not mean that the words should be forced out of their natural meaning, but simply that the words should receive a fair and reasonable interpretation, so as to attain the objects for which the instrument is designed and the purposes to which it is applied. We should never forget that letters of guarantee are commercial instruments, generally drawn up by merchants in brief language, sometimes inartificial, and often loose in their structure and aim; and io construe the words of such instruments with a nice and technical care would not only defeat the intention of the parties, but render them too unsafe a basis to rely on for [236] extensive credits, so often sought in the present active business of commerce throughout the world.” Further on he says: “If the language used be ambiguous and ad mi is of two fair interpretations, and the guarantee has advanced his money upon the faith of the interpretation most favorable to his rights, that interpretation will prevail in his favor; for it does not lie in the mouth of the guarantor to say that he may, without peril, scatter ambiguous words, by which the other party is misled to his injury.” These extracts express so happily my notion of the rules of construction, which ought to prevail in this class of cases, that I need only add, that the same general principle will be found asserted with more or less distinctness in Bell v. Bruen (1 How., 169, 186); Haight v. Brooks (10 Adolph, ana Ellis, 309); Mayer v. Isaac (6 Mees. and, Welsb., 605); Dobbin v. Bradley (17 Wend., 422); Hargreave v. Smee (6 Bing., 244.) In the last case C. J. Tisdale said : “ There is no reason for putting on a guarantee a construction different from what the court put on any other instrument. • With regard to other instruments, the rule is that if the party executing them leaves anything ambiguous in his expressions, such ambiguity must be taken most strongly against himself. ” And Bronson, J., in the case referred to from 17 Wendell, remarks that commercial guarantees are in extensive use, and that he can perceive no reason why they should not receive the same liberal construction for advancing the end which the parties had in view, as is given to other contracts. I am aware that judges have in some few instances spoken of the construction strictissimi juris as the one to be applied to all contracts where sureties are sought to be charged, and that Judge Story himself, in an earlier case than the one from which I have quoted, expressed the opinion that where it was doubtful whether a guarantee created a continuing obligation, the presumption should be against it. (Cramer v. Higginson, 1 Mason, 336. There is a sense undoubtedly, in which it may be said that [237] these obligations are to be strictly construed; and it is this: That the surety is not to be held beyond the very precise stipulations of his contract. He is not liable on an implied engagement where a party contracting for his own interest might be, and he has a right to insist upon the exact perform • anee of any condition for which he has stipulated, whether others would consider it material or not. But where the question is as to the meaning of the written language in which he has contracted, there is no difference, and there ought not to be any, between the contract of a surety and that of any other party. I feel no difficulty, therefore, in reading the short instrument which we are called upon to construe in the sense which every person, when informed of the situation of the parties and wdio had considered the nature of the business it was designed to facilitate, would natur-all}" place upon it. If I am right in the meaning which I have attributed to the several expressions contained in it, it did not look to a single transaction or to dealings between the parties to a particular amount, and its purposes were not fully accomplished when the person whose credit was intended to be aided, had once contracted a debt to the plaintiff to the amount of $500, and had paid that debt. It contemplated a continuous business and a standing credit to the amount mentioned. If I am right in this (and the question is merely one of construction), there is no case or dictum which I have met with, which will exonerate the defendant. The adjudications are very numerous, and although I have examined more than I can conveniently refer to, I will mention the following only, each of which contains principles which will uphold the conclusion which I have arrived at, that this contract is a continuing guarantee. (Fellows v. Prentiss, 3 Denio, 518; Hand, Senator; Clark v. Burditt, 2 Hall, 197; Douglass v. Reynolds, 7 Peters, 113; Bent v. Hartshorn, 1 Metc., 24; Barstow v. Bennett, 3 Camp., 290; Rapelye v. Bailey, 5 Conn., 149; Mayer v. Isaac, supra;. Mason v. Pritchard, supra; Hargreave v. Smee, 6 [238] Bing., 244; Allen v. Kenning, 9 id, 618 ; Hitchcock v. Humfrey, 5 Mann. and Gr., 560; Martin v. Wright, 6 Adolph, and Ellis, N. S., 917). In several of these cases the intention to guarantee a continuous trading was much more distinctly expressed than in the present' case; hut in others, such as Mason v. Pritchard, which has repeatedly received the sanction of the courts in this country and has never been disapproved of in any court, and in Martin v. Wright, which was decided quite recently, the same liberal, or I may rather say natural and reasonable intendment was made, which I have supposed ought to be applied to the instrument under consideration. ' The objection that the consideration was not sufficiently expressed to satisfy the requirement of the Revised Statute of frauds, is answered by the judgment of this court in The Union Bank v. Coster’s Exrs., (3 Comst., 204). I am in favor of affirming the judgment of the supreme court. Hand, J., also delivered an opinion in favor of affirmance. Judgment affirmed.1 Footnotes [1] Re-affirmed in Rindge v. Judson, 24 N. Y. 64. And see Clark v. Burdett, 2 Hall 197. White’s Bank v. Miles, 73 N. Y. 335. Pratt v. Matthews, 24 Hun 386. Sickle v. Marsh, 44 How. Pr. 91.