Cheshire Beef Co. v. Thrall

Munson, J. The defendant agreed in writing to be responsible to the plaintiff as a guarantor “to the amount of $700,” “for goods purchased by Judson TI. Grant.” The question raised is whether this was a limited or a continuing guaranty. The circumstances connected with the giving of the guaranty plainly require that the words “ goods purchased ” be given a future significance. The language thus construed is equally applicable to both kinds of guaranty. We find nothing’ in the case that affords further aid in determining what was intended. There has been no practical construction by the parties, such as was ■considered controlling in Michigan State Bank v. Peck, 28 Vt. 200. It thus becomes necessary to determine what rule of construction shall prevail when the language is ambiguous, and the [11] circumstances afford no basis for a fair presumption as to the mutual understanding of the parties. It is said by some authorities that the contract of guaranty should be construed liberally in favor of its purpose ; that the words used should be taken as strongly against the guarantor as their sense will permit; and that if one intends to be surety only for a single dealing he should be careful to say so. It is said by ether authorities that the scope of a guaranty should be restricted to the plain and obvious import of its language; that a mere surety should not be held to pay the debt of another by any forced construction ; and that in a doubtful case the presumption should be against the construction that the guaranty is continuing. It is said by some that the courts seem inclined to favor an extension of the liability in cases of doubt, while others say that the decided' weight of authority is in favor of the restrictive rule. We are not aware that this court has passed upon the matter; although an expression of Judge Bennett in Noyes v. Nichols, 28 Vt. 159, has led«a text-writer to infer that it favored the view first stated. But we think it is'the more reasonable conclusion that one who becomes a guarantor without valuable consideration should not be subjected to an increased liability by legal implication, and that the burden should be upon the one who desires a continuing guaranty to see that the language employed is sufficient to indicate it. We hold that the defendant’s liability was limited to the first seven hundred dollars, worth of goods purchased. Judgment affirmed.