Staver & Walker v. Locke

Strahan, C. J. The liability of J. S. Locke, the respondent, depends upon the terms of his guaranty. As will be seen from the statement, he guaranteed the faithful performance by the agent named in the foregoing contract of all agreements and engagements therein entered into by the [523] said agent. The only breach of the agreement on the part of W. F. Locke, by which it is claimed J. S. Locke became liable, is that said W. F. Locke failed to pay said notes when they became due, or on demand. The obligation which W. F. Locke assumed in this particular, is contained in the sixth specification of the contract, and is contained in the statement. The duties and obligations assumed by W. F. Locke, by the agreement, are enumerated with great particularity, and are contained in specifications numbered from one to seven, inclusive. The second specification recites that the said W. F. Locke agrees to do all the business, etc.; third, to make all notes, etc.; fourth, to settle for all goods, etc.; fifth, to draw all notes, etc.; sixth, to guarantee the payment, at maturity, or any time thereafter when demanded, of all notes and renewals of notes taken for goods sold under this contract; indorse said notes as soon as taken, waiving demand, protest, and notice of non-payment. If these words in themselves import a guaranty by W. F. Locke of the payment of all notes taken by him for goods sold, then there is much force in the appellant’s contention; on the other hand, if they only bound W. F. Locke to indorse the notes in the manner therein specified, then there is no reason whatever to claim that the defendant is liable on his guaranty, for the reason the complaint alleges that W. F. Locke duly indorsed them. The phraseology used is obscure, and its meaning is not obvious, and the inferences to be drawn from different parts of the agreement are so contradictory and unsatisfactory that wre fail to derive any aid from that source. For instance, the fourth clause obliges the agent to settle for all goods sold, either by cash or notes, at the time of delivery; said agent to be held liable for any loss or damage caused by a deviation from this stipulation. It may be suggested that if he was liable at all events, or as guarantor for all goods sold, why does this clause only hold him liable for any loss or damage caused by a deviation from this stipulation? [524] Besides, if he was liable as guarantor in every case when the purchaser did not pay, why indorse the notes at all? Staver & Walker, under that construction, held a single guaranty covering all defaults; and the indorsements of the notes added nothing to the liability of the agent. Then, on the other hand, it is declared in the latter part of clause six that failure to indorse by said agent shall not affect above guaranty of payments. This language seems to assume that, aside from the indorsements provided for, the contract contained a guaranty of payment. What W. F. Locke agreed to do was to guarantee the payment at maturity, etc.; and the subsequent language of clause six seems to indicate in what manner the guaranty was to be made, namely, by indorsing said notes as soon as taken, waiving demand, protest, notice of non-payment, etc.; all of which the pleadings admit he fully performed. The plaintiff’s contention seems somewhat forced, and the construction contended for, strained and unnatural. The intention of the parties to a contract of guaranty, when ascertained, is to prevail as in other contracts; still, it is said that it is now too well settled to admit of doubt that a guarantor, like a surety, is bound only by the strict letter or precise terms of the contract of his principal, whose performance he has guaranteed; that he is in this respect a favorite of the law, and that a claim against him is stricbissimi juris. (Kingsbury v. Westfall, 61 N. Y. 356.) And in determining the liability of a surety or a guarantor, it must be remembered that he is a favorite of the law, and has the right to stand upon the strict terms of his obligation, when such terms are ascertained. (People v. Chalmers, 60 N. Y. 154; State v. Churchill, 48 Ark. 426.) J. S. Locke’s liability depends entirely upon the construction we have given in article six of the agreement. He guaranteed the faithful and full performance by the agent named in the foregoing, of all the agreements and engagements therein. If W. F. Locke guaranteed the notes [525] by making the proper indorsement tbereon, then be performed bis agreement in that respect, and the defendant would not be liable. J. S. Locke did not guarantee that the agent would pay the notes which he might take from purchasers of the plaintiff’s goods, but only that such agent should guarantee the payment. There is no breach of the agreement shown to charge the respondent. The court below did not, therefore, err in sustaining the demurrer to the complaint. The judgment appealed from must be affirmed.