Everson v. Gere

Follett, J.: Section 1910 of the Code of Civil Procedure provides that “any claim or demand can be transferred except in one of the following cases.” The case in hand is not one of those excepted. An expectancy in a potential demand and a demand resting on a ■contingency are assignable, and if they ripen into causes of action the assignee can recover them in his own name. (Field v. The Mayor, 6 N. Y., 179; Stover v. Eycleshimer, 3 Keyes, 620; Devlin v. The Mayor, 63 N. Y., 8-15.) Unless the possible or contingent right of action of John Crouse & Co. upon the guaranty is unassignable by its terms or nature, the plaintiff acquired title to the guaranty and a perfect cause of action under it and the assignment. A general guaranty is a security for all persons who deal upon its credit. A special guaranty is a security only for the particular person to whom it runs or to whom it is addressed. (Evansville National Bank, v. Kaufmann, 93 N. Y., 273, 276.) A letter of credit addressed to a particular person, or an agree- ■ ment to pay for goods which a particular person may sell to another, are instances of special guarantees. In such cases the guarantor is deemed to have relied upon the character and discretion of the person addressed, and he cannot, by an assignment or an appointment, confer upon another the right to furnish the credit and recover of the guarantor. The cases arising under this class of guarantees need not be specially considered; as an absolute guaranty to pay an ascertained debt, evidenced by a written instrument, negotiable in its nature, rests upon a different principle, notwithstanding some of the cases have extended the rule applicable to special guarantees to absolute guarantees of fixed debts; nor is it necessary to consider the cases discussing the question, whether a guaranty like this, indoi’sed upon a negotiable note, is ipso facto transferred bv a transfer of the note -without an assignment of the guaranty; for in this case the note was transferred by indorsement, and the guaranty by assignment to the plaintiff. The question is not, therefore, whether this guaranty was negotiable, in the restricted •sense of the word, as applicable to commercial paper; but whether it is negotiable in the sense that it is capable of being negotiated and transferred by sale and assignment. The guaranty being upon an allonge, it is to be construed and given [251] tbe same effect as though written on the note. (McLaren v. Watson’s Exrs., 26 Wend., 425; Folger v. Chase, 18 Pick., 63.) And they are to be construed together. (Union Bank v. Coster’s Exrs., 3 N. Y., 203; Church v. Brown, 21 N. Y., 315; Marsh v. Chamberlain, 2 Lans., 287, 293.) Guarantees are governed by the rules of construction applicable to other contracts. (Belloni v. Freeborn, 63 N. Y., 383 ; Evansville Nat. Bank v. Kaufmann, 93 id., 273; Crist v. Burlingame, 62 Barb., 351; Baylies on Guarantors, 111.) • It is conceded by the respondents that had the note and guaranty been transferred to the plaintiff after the note had been dishonored he would have acquired a perfect cause of action against the guarantors, but it is said that before that event the guaranty was not assignable. It must be conceded that parties may, by express words, limit the right to assign a guaranty before a cause of action arises upon it, but courts will not presume that they have done or intended to do so when the guaranty relates to negotiable paper, unless the intention to render the guaranty unassignable clearly appears upon the face of the contract, or from the surrounding circumstances. (Devlin v. The Mayor, 63 N. Y., 8, 17.) The note and guaranty in this case, read together in the light of commercial usages, lead us to the conclusion that the parties to the guaranty did not intend to restrict its assignability, and that such is not the legal effect of the contract. In Smith v. Starr (4 Hun, 123), the distinction existing between executory guarantees involving trust and confidence, and executed guarantees of the payment of a fixed debt was not observed. All of the cases cited in support of that decision arose over special executory guarantees. The judgment is reversed and a new trial granted, with costs to abide the event. HaRdiN, P. J., and BoaudmaN, J., concurred. Judgment reversed, new trial ordered, costs to abide event.