Central Investment Co. v. Miles

Ryan, C. In the district court of Douglas county it was alleged by the plaintiff, the executor of J. L. Miles, and by James Thompson, that the defendant the Central Investment Company had sold, assigned, and delivered to said Miles and Thompson three promissory notes originally made1 to the Central Investment Company, and indorsed upon each the following guaranty: “We guaranty collection of the within note and waive notice of protest, “Central Investment Company, “By M. S. Lindsay, “President and Manager.” In the petition there were joined with the Central Investment Company as defendants the maker of said notes n nd three sureties thereon. The Central Investment Company demurred to the petition, and the district court on said demurrer held that the Central Investment Company could be sued as it was sued, notwithstanding the guaranty -by it Avas merely of collection, and not of payment, and there was judgment accordingly. In Bosman v. Akeley, 39 Mich. 710, the holdings of several courts are reviewed with the conclusion announced by Cooley, J., that a mere guarantor of collection could not, over his objections, be held liable jointly with the principal even though it was alleged that the latter was insolvent, but the guaranty implied that the property of the maker should be exhausted before resort could be had to a guaranty of collection. In Peck v. Frink, 10 Ia. 193, it was held, where the payee of a note had transferred it by an indorsement of the form of that on which the Central In-Arestment Company Avas held liable in this case, that, to render the guarantor liable on his guaranty, it was necessary to show that the note could not be collected of the' maker. To the same effect was Dewey v. Clark Investment Co., 50 N. W. Rep. [Minn.] 1032. We think that rale is [274] .sound, and accordingly the judgment of the district court is reversed. Reversed and remanded.