Mizner v. Spier

Mr. Justice Gordon delivered the opinion of the court, January 3d 1881. The learned judge who tried this case, whilst admitting that his ruling on the facts was wrong, yet refused a new trial because, as he thought, the writing under consideration being, in fact, an original undertaking, and not, as upon its face it purports to be, a guaranty, a re-trial would but result in a verdict the same as that already rendered. Whilst we grant that the arguments leading to this conclusion are not without plausibility, yet, upon a careful review of the authorities, we have been led to a different opinion. The undertaking in 'controversy was appended to three several judgment notes, drawn by M. R. Kerney, Hugh Montgomery and William Oorll, to Seth Spier, the plaintiff, and reads as follows : “ I guarantee the payment of the within note, for value received. L. H. Mizner.” Without doubt this is technically a guaranty, and unless there is in the case something which we have failed to discover, by which its legal meaning is altered, it must be so treated. In Isett v. Hoge, 2 Watts 128, an undertaking of a like character was held to be a guaranty. The similarity of this case with the one in hand will be apparent when the two agreements are compared ; the one is: “I do hereby guarantee the payment of the above note to said Henry Isett;” the other: “I guarantee the payment of the within note, for value received.” Thus, though there is, between these two contracts, a slight verbal difference, their legal effect and meaning are precisely the same. To attempt to distinguish these two cases would be idle, and unless we overrule Isett v. Hoge it must govern. But, as we would, in its overruling, be supported neither by authority nor reason, we must permit it to stand, and under its authority hold that Mizner’s undertaking was an agreement to pay only in case of the insolvency of the makers, or after due diligence had been used to collect the notes from them. Nor do we discover anything in the authorities, cited for the [539] plaintiff, which in any degree impugns the doctrine of Isett v. Hoge. In Amsbaugh v. Gearhart, 1 Jones 482, the agreement was: “ I will see the within paid;” there is-in this nothing more or less than an unconditional promise to pay the obligation when due, if, for any reason, the payor is in default. It is a contract of suretyship and not of guaranty. So, in Campbell v. Baker, 10 Wright 243, though the word guaranty was' used, yet as the guaranty was to pay “ when due” the undertaking, obviously, had reference to the liquidation of the note at the time specified and not to the solvency of the maker. A like case is Roberts v. Riddle, 29 P. F. Smith 468, where the guaranty was to pay the bond according to its terms,” and as one of its terms, of course, was its payment when due, the undertaking was, in effect, not different from that in Campbell v. Baker. Some stress seems to be laid on the fact that the guaranty, in the case in hand, was made at the time of the execution of the note; this, however, affects not the character of contract, but only the consideration by which it is supported. As was said in Snevily v. Johnston, 1 W. & S. 309, where the guaranty is made at the same time with the principal contract, it becomes an essential ground of the credit given to the debtor, and supports both the promise of the debtor and of the guarantor. On this point this case is authority, but not so when used to support the main proposition of' the plaintiff. The words of the contract expressed a warranty, and by all parties the case was treated as one of warranty; the insolvency of the maker was proved by the plaintiff as a pre-requisite to his recovery, and the only question was that of consideration, which was settled as above stated. The disposition of this point leaves nothing further for us to say except that the defendants’ fourth and fifth points should have been affirmed without qualification. If it was true that the principal debtors, or any of them, residing within the county of Mercer, or, for that matter, within the' state of Pennsylvania, were solvent when the notes fell due, it was the duty of the plaintiff to have used proper diligence in the collection of those claims, and failing-in this the guarantor was discharged. Mizner’s assent to the stay of the executions of 1874, was of no force if at that time Montgomery was insolvent, for, in such case, the attempt to make the money on them would be fruitless, and, if he was already released from his undertaking, there would be in this no such new consideration as would serve to rebind him. But if, at that time Montgomery was solvent, able to pay the notes in whole or in part, the stay, if given at Mizner’s instance, would be consideration enough to rebind him to his original contract, or, what comes to the same thing,' to estop him from setting up the previous negligence of the plaintiff by way of release. The judgment is reversed and a new venire ordered.