White v. Case

By the Court, Nelson, J. The question presented by this case is, what is the true construction of the guaranty ? It is, clear, if, according to the true construction of the terms of the guaranty, legal proceedings against the maker must be had before the holder cancall upon the guarantor, thatnothing can dispense with such proceedings but the act of the guarantor himself. The liability does not arise until the precedent condition is performed. The act of God, or of the law, cannot vary the terms upon which the guarantor agreed to become liable. It is a part of the consideration which cannot and should not be dispensed witb,byeither of these acts. Comyn’s Digest, tit. Condition, D. 1. Ibid. Action, Assumpsit, G.Bacon’s Abr. tit. Condition, M. Co. Litt. 206. Ughtreds’s case,7 Co. 1. Fonblanque, 400. 2 Vern. 340. Powell on Contr. 265. 19 Johns. R. 71. 6 Cowen, 624. The question then arises whether legal proceedings against the maker are indispensable as a condition precedent, according to the true meaning of the contract. The term collection may undoubtedly imply such proceedings; but might not circumstances exist to excuse their omision, independently of anyinterfereneeof the de [545] ant" himself, within the meaning of the contract 1 The intent of the guaranty was to secure the payment of the note, and a suit at law is only a means of accomplishing it. If the means are expressly prescribed in the contract, as in Moakley v. Riggs, 19 Johns. R. 69, and Thomas v. Wood 4 Cowen, 173, they must be complied with, being a part of the contract, provided the party is within the jurisdiction of the state. If it is impracticable to use the ordinary means of coercing payment, in consequence of the defendant being gone to parts unknown, or beyond the reach of legal proceedings in the state, a reasonable construction of the terms of the contract and of the intent of the parties would control the implied obligation which,upon the face of the guaranty, was prima facie imposed. The term collection alone is equivocal,and should receive an interpretation in reference to the subject matter of the contract, and the situation or-condition of the maker. It would be, I think, too much to say, from the terms used, that the parties understood that the only test of liability of the guarantor was a suit at law against the principal. A more reasonable and probable construction would seem to be, that the guarantor intended to warrant that the note could be collected in that way—that is, by suit—and which must imply not only ability on the part of the maker to pay, but that he would be in a situation to be sued within the jurisdiction of the state in which the contract was made. So in the common case, where by the guaranty the party is obligated to pay after due course of law, the contract reasonably and fairly implies an undertaking, on the part of the guarantor, that the principal will be in a situation to be sued, or, in other words, within the jurisdiction of the state, so that he maybe sued when the demand becomes, due. It does not, however, appear in this case but that the. note could have been collected by proceedings at law. The only evidence of the departure of the .maker from the state was hearsay; but if he in fact departed from the state, for aught that appears, a resort to legal proceedings, such as an attachment under the absent and absconding debtor act, might have insured the collection of the money. The plaintiffs therefore [546] failed in laying a proper foundation for their action against the defendant, and the judgment of the common pleas must be affirmed, Judgment affirmed.