Samuel Train & Co. v. Jones

Redfield, J. This contract is not a continuing guaranty, for it has reference only to one transaction. Its obligation is future, indeed, and conditional, and, in that respect, it is in [445] the nature of an offer. But the condition, upon which the liability attaches, is the act of a third person, which act the defendant was as much bound to take notice of, as the plaintiffs. I find no case at common law where notice of. the acceptance of such a guaranty has been required. No doubt the plaintiff should be required to act in good faith towards the defendant. But we should not extend this principle so far, as to require the plaintiff to give the defendant express notice of what was already known to him. Such a doctrine would involve the grossest absurdity. This court held the same doctrine in the case of Lorillard v. Williams, Chittenden county, Jan. T. 1832, not reported. The American cases, referred to, seem to require express notice in every case of a guaranty to take effect upon a future credit. But none of those cases have gone so far as to decide that such notice is necessary, when the guarantor is standing by when the credit is given, or is otherwise advertised of the fact of such credit being given. And this court would not be inclined' to extend this principle of American law, which, in its most limited form, does not seem to rest upon the most satisfactory reasons. It is not easily to be perceived, why, in a case like the present, there is any good reason to require the plaintiff, to show more than that he delivered the goods upon the credit of the guaranty, which is the only condition, even hinted at in the guaranty, necessary for the plaintiff to perform, in order to fix defendant’s liability. Such, indeed, is the decision in the case of Caton v. Shaw, 2 Harris & Gill’s R. 13. But in the cases cited by defendant, and in Showell v. Knox, 1 Devereaux’ R. 404, a different opinion is expressed. Upon the other point in the case, we think the plaintiffs were not bound to make demand of the debt of Augustus Jones, or to give the defendant notice of non-payment. In the case of Smith v. Ide, 3 Vt. R. 290, the terms of the guaranty are very similar to the present case. “ Mr. Gilman says he has bought a pair of horses of you, for $260, in sixty days. I will warrant him to pay according to his agreement.” In that case, it was held that the contract amounted to an absolute guaranty of the payment of the money, at the expiration of sixty days, and that it was not necessary for the creditor to make any demand of the [446] debtor, or give notice of non-payment to the guarantor. In the case of Breed v. Hillhouse, 7 Conn. R. 523, the same doctrine is held. From all the cases, this rule is, we think, fairly deducible. An absolute guaranty, that the debt of a third person shall be paid, or that he shall pay it, imposes the same obligation upon the guarantor. In either case, it is an absolute guaranty of the sum stipulated, and the creditor is not bound to use diligence, or to give notice of nonpayment. But where the guaranty is, that the creditor himself shall be able to collect the debt of some third person, there it is incumbent upon the creditor to use diligence, and to give reasonable notice of non-payment. Foster v. Barney, 3 Vt. R. 60. Russell v. Buck, ante, 166. This is in accordance with the long established rule of the common law. If I undertake for the act of a third person, I am not entitled to notice of his default, before suit brought; but if I undertake directly for your act, or success, I am entitled to notice of your failure, for this is a fact peculiarly within your knowledge. This point is virtually decided in Knapp v. Parker, 6 Vt. R. 642. Judgment affirmed.