McCollum v. Cushing

Mr. Chief Justice English delivered the opinion of the Court. This suit was founded on the following letter of guarantee: “ Camden, Ames., 6th October, 1857. Messrs. Cushing, King & De Graw: Gents — -'We take pleasure in introducing to your acquaintance, Mrs. Hitchcock, a lady of this place, who visits New York for the purpose of purchasing a small stock of goods in the millinery line. Should she wish to purchase; a part of her bill on time, we would say that she would meet the bills promptly, and that we will guarantee for her to the extent of five hundred dollars, to be paid in six months. Mrs. II. has resided here for the last year, and her business has been successful and profitable. Any attentions or civilities extended to her, will be duly appreciated by her and your ob’t servants, P. MoCOLLUM & CO." Cushing, King & DeGraw, the plaintiffs below, declared specially, in assumpsit, upon the letter, against McCollum & Co; On the trial before the court, sitting as a jury, upon the general issue, the above letter was introduced in evidence, and it was proven that the plaintiffs sold goods to Mrs. Hitchcock, to whom the letter was given by defendants, and took her note for $405, dated New York, October 22d, 1857, payable six months after date. The note was read in evidence, with the indorsement showing a payment of $200, May 31st, 1858. The court rendered judgment in favor of plaintiffs for $202, damages, the defendants moved for a new trial, and in arrest of judgment, which were overruled, and they appealed. It was not averred in the declaration, nor proven on the trial, that the appellees ever gave any notice to appellants, that the letter of guarantee had been accepted, and goods sold to Mrs. Hitchcock upon faith of the guarantee. The law on the subject of notice of acceptance of the guarantee is expressed by Mr. Justice Story, in Douglass et al. vs. Reynolds et al., 7 Peters 125, thus: “ A party giving a letter of guarantee has a right to know whether it is accepted, and whether the person to whom it is addressed means to give credit on the footing of it, or not. It may be most material, not only as to his responsibility, but as to his future rights and proceedings. It may regulate, in a great measure, his course of conduct and his exercise of vigilance in regard to the party in whose favor it is given.” See, also, Lane vs. Levillian, 4 Ark. 84. Nor did the declaration aver, nor was it proven upon the trial, that appellees demanded payment of Mrs. Hitchcock, on the expiration of the credit and maturity of the debt, and gave the appellants notice of non-payment by her. On the subject of demand of payment upon the principal debtor, and notice to the guarantors, the learned judge, above quoted, states the law to be as follows: “ By the very terms of this guarantee, as well as by the general principles of law, the guarantors are only collaterally liable upon the failure of the principal debtor to pay the debt. A demand upon him, and a failure on his part to perform his engagements, are indispensable to constitute a casus foederis. The creditors are not indeed bound to institute any legal proceeding against the debtor, but they are required to use reasonable diligence to make demand, and to give notice of the non-payment. The guarantors are not tobe held to any length of indulgence of credit which the creditors may choose; but have a right to insist that the risk of their responsibility shall be fixed, and terminated within a reasonable time after the debt has become due.” Douglass et al. vs. Reynolds, ubi sup. See, also, Lane vs. Levillian, ubi sup. The appellants were declared against as Peter McCollum and John E. McCollum, partners, etc., under the firm name and style of P. McCollum & Co.; and the declaration charged that they, by their firm name, executed the letter of guarantee sued on. They pleaded non-assumpsit, but their plea was not verified by affidavit. The court below decided that it was not necessary for the plaintiffs, under the issue, to prove the partnership; and the decision, we think, was right. The instrument of guarantee was made the foundation of the action, and, in the language of the statute, it was charged to have been executed by both of the defendants as partners, etc., and the allegation not being denied by sworn plea, the instrument was admissible in evidence without proof of its execution by either of the defendants, or of the alleged partnership. Gould’s Dig., chap. 861, sec 103. The case of Alford use, etc., vs. Thompson et al., 5 Ark., was upon a different statute. See Gould’s Dig., chap. 99, sec. 111, p. 668,-9. The judgment must be reversed, and the cause remanded for further proceedings, etc.