Cochran v. Dawson

The opinion of the Court was delivered by Jones, J. The contract of guarantee is a secondary liability. It is a promise to be answerable for a debt or duty in case of the failure or default of another person, who is liable in the first instauce. [278] Johnson v. Chapman, 3 Penns. Rep. 19 ; 3 Kent's Comm. 85. When the contract is indefinite as to the time or manner of the default, the creditor or person to whom the duty is due, is bound to show the failure or default upon which the contract of guarantee is suspended ; and to show this, he is in general obliged to show the insolvency of the principal debtor, or that coercive means have been used against him without effect. But there is no doubt that the contract of guarantee may be so modified as to dispense with active duties on the part of the person entitled to the benefit of it. In this case however the doubt is, whether the defendant was not the original debtor, and liable under a count for goods sold and delivered to him at his special instance and request. But adopting the defendant’s view of the nature of his liability, he guarantied that Jones should pay the plaintiff for the lumber before the close of the year, and in case of his default, that he would see it paid ; that is, pay it at the expiration of that period. The effect and even the literal purport of the agreement was to exonerate the plaintiff from the duty of pursuing Jones. It imposed upon the defendant the duty of preventing a default in Jones after the close of the year. As he did not do so, he was himself in default; his agreement was broken ; and upon the breach he became liable as a principal debtor, as really so as if he had joined with Jones in the execution of a joint and several bond. It is a universal rule that the breach of a contract gives an immediate right of action. In the case of general guarantee, the contract, generally speaking, is not broken until the creditor has used means to compel payment _by the principal debtor without effect. But it seems impossible to read the contract of this defendant without seeing that it was broken on the 1st of January 1835. The defendant undertook that the plaintiff should be paid before a given day, and the payment was not made before that day or afterwards. If that do not constitute a breach of contract, it must be because the undertaking itself was not a contract, or the violation of its terms was not a breach. As to the point of evidence, Jones was called by the plaintiff to prove the delivery of the lumber to him, in pursuance of the order. If we suppose Jones to be the principal debtor, he would be liable to the defendant in the event of a recovery and satisfaction from him. He could therefore gain nothing in that event. The creditor only would be changed. If the defendant was the principal debtor, Jones was liable to neither: but if the defendant was only liable as surety [279] for Jones, and Jones bad boon raUed by him to defeat the action, the plaintiff ought ii.ue cU¡ ved io hi- ivmp'-inicy ; but he was introduced by ¡be |i'a"it ff to eb:'i ,v tit" d.nendanl. Then* is tbeielbif no ibuudniion Ibr a new trial in this case. Rule discharged.