Gaster v. Ashley

Lacy, Judge, delivered the opinion of the court: This is an action of covenant,-founded'on an endorsement, under the seal of Chester Ashley to Stephen Gaster, upon a deed of bargain and sale for the conveyance of a donation claim to three hundred and twenty acres of land, executed by Robert Mays to the defendant in •error. The declaration contains three counts, each averring the same ■cause of action; but charging the defendant in different ways. The deed from Mays to Ashley is for the consideration of four hundred dollars, and recites the usual covenants in such conveyances. That the grantor has a good and valid claim, agreeable to the act of Congress —that the claim is properly proved up before the Land Officers, and that if aiiy other proof is necessary to establish its validity, he will furnish the same — that the grantee shall have full power and authority to enter the said claim on any of the public lands, ashis agent and his attorney in fact, and upon demand or without it, as soon as the President of the United 'States shall issue patents on the said entry — that he will execute a deed with general warrantee in fee simple, to the grantee and his heirs for the land previously located, and upon which the grant has emanated. On the back of this deed is the following endorsement: “Know all men by these presents, that I, Chester Ashley, for and in consideration of eight hundred dollars, to me in hand paid by Stephen Gaster, the receipt whereof is hereby acknowledged, have assigned, transferred, and set over to the said Gaster the within bond, and hereby guarantee that the said claim shall be confirmed at the land office at Helena, within.a reasonable time’; and that the said claim to a donation is a legal and valid ciairn. Witness my hand and seal, •this 6th day of July, 1835. Chester Ashley, (n. s.) The defendant is only sought io be charged by the latter clause in the eovenant, and the breaches assigned are, that he did not cause to be confirmed at the land office at Helena, the said claim of the said Robert Mays within a reasonable lime; and that the said claim to a donation was not a legal and valid claim at the time of making the agreement, but a wholly illegal and invalid claim. At the return term of the writ, the defendant appeared, and craved oyer of the writings declared on, which was granted. Tie then filed a general demurrer to the declaration, to which there was a joinder; and judgment was thereupon rendered in favor of the demurrer, and against the sufficiency of the declaration. 'The cause now stands on a writ of error sued out and prosecuted by the plaintiff to reverse the judgment of the court below. The record and the assignment of errors present but a single question, which is, does the declaration contain a good cause of action, and are the breaches properly assigned? It is contended on behalf of the defendant, that the present action cannot be maintained, nor are the breaches well laid. The instrument sued on is said to be a mere assignment of a chose in action, coupled with a personal guarantee for the ultimate performance of the original-obligor’s bond. On the other hand, it is insisted for the plaintiff in.error, that the defendant’s writing obligatory is a covenant to all intents and purposes, and that it is an original, and not a collateral liability. If the first proposition be true, the declaration is fatally defective, and was rightfully adjudged bad on .demurrer; for no position is more clearly andincontestibly established by all the authorities, or more consonant to reason • and justice, than -that in action of debt or covenant, against the assignor upon a personal, collateral guarantee on an assigned note or bond,-it is indispensably necessary that the plaintiff should allege in his declaration he .has used due diligence in prosecuting his suit against the original obligor,' or that he is wholly insolvent and unable to pay. Without some such .averment, no cause of action accrues; for the breach entirely depends on the happening of the precedent conditions, and .therefore in every instance of the kind such an allegation is one essential prerequisite to the maintainance of the action. The cases cited at the bar in favor of the defendant unquestionably prove the principle here stated, and have exclusive reference to it. 3 J. J. Marshall, 360; 4 J. J. Marshall, 304; 3 Monroe, 75; Call, 497. Before these principles can be considered as applicable to the case now before the court, the defendant must show from the deed itself, or the legal 'inference fairly dedticible from the 'contract, that he only intended' to- bind himself by his assignment and guarantee, for the performance by the obligor of the condition of his bond. The court,, in examining the question, do not deem it very material to determine whether the deed of bargain and sale from Mays to Chester Ashley, is assignable under our Statute, 'or not; for, be that as it may, the defendant would still be held liable,-if the latter clause in-the assignment contained’ within itself a distinct and independant covenant, separate and apart from the agreement on the bond; and he can in n6 way he made responsible in this action, if he is only bound as collateral securitj'. So far, however, as the covenant of Mays, and the entire assignment of it can throw light on-the real’intention and design of the parties,it should be looked to, and regarded as furnishing no ordinary evidence, by- which the. contract may be rightfully interpreted’. The enquiry then is, what is the character or nature of the- agreement declared on. Is it a covenant, or a collateral guarantee? A covenant is an agreement, or consent of two or more .persons by deed, in writing, sealed and delivered,, whereby either the one or the other of the parties doth promise that something is done already, or shall be done afterwards. And this is either express or in deed, i. e. when the covenant is express in the deed, or it is implied, or in law, i. e. when the deed doth not express;- but the law doth make and supply it. See-Shepherd’s Touch Stone, C. VII. No particular form or technical-words are necessary to create a covenant; but any words which show the intention of the parties, will be sufficient for the purpose. Hollis vs. Carr, 2 Mod. 38. For a covenant may be by any words, and upon; any part of the agreement, in writing. 1 Leon, 324. The word covenant is not necessary to make a covenant. 1 Rolle Abr. 518; 1 Burr 299; Hallet vs. Willis, 3 J. R. 44. In Bull vs. Follett, 5 Cow. 170, it is said that no precise or formal terms are necessary io constitute a covenant. The enquiry always is, What was the intention'of the parties. In construing a covenant, it must be considered'») reference to the context, and be performed according to the spirit and intention of the parties. Marvin vs. Stone, 2 Cow. 781; Quaekenboss vs. Lansing 6 J. R. 49. In the case of Iggulden vs. May, (7 East, 242; Plowdon, 329,) it declared that the intention of the parties is to be collected from the context of the instrument itself, wni'ch is to he construed according to the obvious meaning and reasonable sense of the words jf. there be any ambiguity in the terms, such a construction shall1 be given as will militate most strongly against the covenantor. By applying these rules to the case under, discussion, we shall find little or no ■ difficulty in discovering- the real intention of the parties, the true nature and object of the contract sued on. It is said that the fact of the signing of the bond demonstates what was the intention of the parties; for why assign it, if the defendant intended to make himself responsible in the first instance. There are two obvious answers to this question: In the first place it is exceedingly questionable whether such a deed of bargain and sale-can pass, by assignment at law. The equity may be assigned — the legal estate probably cannot be assigned. Secondly, admitting that it can, which is by means conceded, still the peculiar character of the claim conveyed,- would induce the assignee to- wish to have the title papers in his possession, that he might be able to make the locations in the claimant’s own name, as the law required; and as these muniments of title would be wholly, useless to the assignor, and he of course would he willing !o transfer them-, or part with,them, by assignment. Again:- if the original obligor isan-swerable to the assignee, to what amount is he bound? Certainly for nothing more than the consideration money and-interest, expressed in his deed, which-is four hundred dollars; whereas, the assignee has paid to the assignor just double that sum, as their agreement on .its face shows, so that the responsibility of the original obligor would fie no adequate indemnity for the loss that the present plaintiff sustained-, by reason of the defendant’s assignment. He cannot have atone and .the same time a divided responsibility, for one and the same cause of action. The very idea involves a legal contradiction, and it proves if true, that he has a perfect legal right, without, any adequate or legal remedy. This view of the case goes far to prove that the plaintiff never looked to the obligor’s original bond, in the event he should be damnified; but that he regards the defendant as alone answerable to him on his assignment of warranty. If any thing should be wanting to strengthen this conclusion, the intention of the parties may b.e fairly collected and inferred from considering to. whom was the purchase money paid, and to whom was full faith and credit given. Certainly not to the original covenantor, but to the defendant in this action. He received the- consideration money, and on his deed the plaintiff.' implicitly relied. For any thing that appears, the original claimant. was an entire stranger to the contract. The plaintiff might be very willing to trust to the responsibility and guarantee of the defendant, but wholly unwilling to place any confidence or reliance upon the ul-tímate security of the claimant. Besides, the agreement between the parties has all the essential requisites of a covenant. It is in writing, signed, sealed and delivered by the assignor, with a promise to do-a particular act. If there should'still be any doubt or uncertainty as to the intgption or meaning of the contract, the latter clause of the instrument will place the matter beyond all controversy or dispute. The defendant, after reciting the assignment on the bond, further adds:— “ I hereby guarantee that the said claim to a donation, is a legal and valid claim.” What is the meaning of the word guarantee, as used in this agreement? Does it purport to be a collateral or an original undertaking? In what sense did the parties use it? All words or' terms used are more or less arbitary. and the same word or term frequently has several wholly different and distinct meanings. This is one of the imperfections that essentially belong to the nature of all written or spoken language, and the evil, if it can bo called one, is remedied by the governing words in the sentence, that precede and •follow the doubtful term, by the embodied form and proportions of the ideas sought to be conveyed; and, above all, from the sense and intention of the parties, that define and limit these meanings, which is principally to be gathered from the context of the whole instrument and every part of it, and from the subject matter about which it treats. That the word “guarantee” is very generally employed to signify a remote liability, is admitted; but it does not thence follow, that it is not frequently used to mean a direct or positive engagement. Its ordinary acceptation is to secure, promise, to bind, agree, to warrant, and to defend. It is often inserted in deeds of conveyance, and when it is used, unless its sense is limited or extended by the context of the writing, or the legal consequence of the act, it is synonymous with promise, agree, with warrant, or defend, And in this sense it is used in the deed or assignment executed by the defendant. If it was even doubtful, how it was intended to be employed, still the court is bound to give it such meaning as is most natural and obvious, and which would best carry out the true intention of the parlies, and promote the objects of the agreement. The deed should be so construed as to be made io-stand if practicable; for it is under the authority and solemnity of a .seal; and hence the legal presumption, that if words be used in a covenant or deed, which will admit of two interpretations, or are in any manner doubtful, they! shall be taken to operate most strongly against him who made the grant. To guarantee a title is to warrant that title. To guarantee a right is to defend that right; to guarantee the validity of a claim is to covenant that the party making the deed is seised of an indefeasible estate, of inheritance in fee; for what is a valid and lawful title, but covenant of seisin, and in declaring on such an instrument, the plaintiff need not aver that he was legally^victed: for the deed is a personal covenant' — the breach of it happens, if at all, at the very moment of its execution. The authorities upon this point, and the reason upon which they proceed, were fully collected and analyzed in the case of Logan vs. Moulder, decided during the present term of this court. It is, therefore, deemed unnecessary and inappropriate to go again into the investigation of that subject. See Greenbyvs. Wilcocks, 2 J. R. 1; Abbot vs. Allen, 14 J. R. 248. It was unnecessary for the plaintiff to have averred in his declaration, that the claim was not,confirmed within a reasonable time-.— This allegation is surplusage. The cause of action did not depend on any subsequent failure of title, but on the assignors total inability to convey any right or title. And as there is clearly one good breach assigned, to wit, that the claim at the time of make the endorsement, was a bad, illegal, and invalid claim, the action is well founded, and the breaches properly laid. See 4 Bibb, 300; 3 Bibb, 332; 1 Chitty, 325, 6, 9. In every point of view in which we are capable of considering this subject, we are clearly of opinion, that the agreement of the defendant is a covenant to all intents and purposes for which it was executed.— That it contains all the essential ingredients of a deed of such an-assignment, that it was so understood by the parties themselves, and that intention is manifest and demonstrable from the nature and1 char-aeter of the whole transaction. The agreement itself contains1 apt and appropriate terms to constitute a covenant. It consists of two" parts: the first is a new assignment of the original obligor’s bond,which is-one thing; the second is a personal guarantee or covenant of title, which is wholly a distinct and different matter. In all probability the vendee would never have purchased, or the1 vendor parted with the title, had it not been for the assignor’s express- and declared warranty.. To the faith of that he alone trusted, and-upon il paid the parchase money; and it would be, therefore, both un■reasonable and unjust to compel him to resort to any other or wholly different liability. This being the case, the . judgment of the Circuit Court was evidently erroneous in sustaining the demurrer. It must, therefore, be reversed with costs, and the cause remanded, to be pro-needed in agreeably to the opinion here pronounced, and leave granted to the defendant, • if he ask it, to withdraw his demurrer? and plead over to the action.