Williams v. Granger

Trumbull, J. It is apparent from the pleadings and record of the process, that the court below considered this endorsement of Granger as an endorsement in common form, warranting that the note in question was due and collectable by using due diligence ; in which case, it would have been the duty of Williams to have shown to the court, that he had used all due diligence in en-deavouring by law to collect the sums due by said note, from Phelfis, and on failure to have given immediate notice to Granger, to enable himself to maintain an action on such endorsement. But the endorsement in this case is a new, separate, and independent contract between Granger and Williams relative to the note, though it begins with a warranty of the responsibility of Phelfis. Phelfis had executed a note to Williams, promising to pay to him one thousand and fifty dollars and thirty cents, with interest, on the first day of October, A. D. 1806. This note was executed on the first day of November, A. D. 1805. On the 14th day of said November, for the purpose of securing the payment of said note, Granger enters into a written contract endorsed thereon, in and by which he, for value received, warrants the [447] ability of Phelps to pay the note, and that he shall eon-tinue to be of sufficient responsibility until the day of . . . payment mentioned therein, and then adds this clause: “ A.nd I further engage with said Williams, the promisee, that if the moneys mentioned in said note are not paid by the 5th day of September, in the year 1807, I will onr that day advance the same to him, taking and holding the note as my own, at my sole risk.” Phelps wholly failed to pay the note either on the day of payment mentioned in it, or on said 5th day of Sep-tember1807, which was eleven months after it; nor had he ever paid said moneys or any part of them. Williams, on that failure, brought his action against Granger on his contract. Granger pleads that Williams never commenced any suit against Phelps; that Phelps was, and continued till the date of the plaintiff’s writ to be, a man of abundant property; and that Williams never, prior to the date of his writ, gave notice that Phelps had failed to make payment on the note, or made any demand of payment on him, on account of said failure. On demurrer to this plea the court below adjudged it sufficient, and that Granger should ^recover his casts. To obtain a reversal of that judgment, Williams brings his writ of error before this court. This is not the case of a mere endorsement, but arises on the special contract executed by Granger to Williams. He wanted better security. Granger, for value received, undertakes to guaranty, and also to pay, the note on said 5th day of September, in case Phelps should fail to pay it by that day. The object appears to have been to obtain for Phelps a further forbearance of eleven months. No act was required on the part of Williams for obtaining the money of Phelps. He was merely bound to receive it, if offered. On failure of payment, Granger’s contract became absolute on that day. But Phelps is allowed time till the same day to pay it, and save Granger from his liability. No special notice was necessary on [448] that day in order to render Granger liable; for his engagement became immediately absolute on the failure of Phelps. Williams had indeed his election to prosecute an actjon against Phelps, or rely on Granger’s contract; but had he immediately, after the note fell due, sued Phelps, obtained judgment against him, and failed of procuring payment on his execution, he would have put it out of his power to assign and deliver over the note to Granger on said 5th day of September. When Granger’s promise to pay the money to Wil-Hams had become absolute, no special demand previous to the commencement of a suit was by law necessary, any more than in the case of a common promissory note. Many authorities in some degree analogous, were cited on each side at the bar, but the discussion of them is unnecessary. The cause depends wholly on the true construction of the special contract between Williams and Granger. For these reasons, I am of opinion that the judgment below was erroneous, and must be reversed. In this opinion t£e other judges severally concurred. Judgment reversed.