Hungerford v. O'Brien

Dickinson, J.1 '*Tbe defendant Sawbridge made his negotiable promissory note, which was indorsed to one Gage, who indorsed it in blank ■to the defendant O’Brien, and he, before maturity, transferred it for value to the plaintiff, indorsing upon the note and signing this guaranty : “Eor value, I hereby guaranty the payment of the within note to Cassie Hungerford or bearer.” The note was not paid. Nothing was done by the plaintiff at the maturity of the note to fix the liability of the indorser Gage. The defendant O’Brien had no notice of the non-payment of the note until more than a year after its maturity. Upon the trial of the issue raised by ttoó¿ answer of the defendant 'O’Brien, evidence was presented tending to.show that the maker of the note was solvent at the time of its maturity, but has since become insolvent; and that the indorser, Gage, was also solvent. The court directed a verdict for the plaintiff. The nature of the obligation of the guarantor is affected by the character of the principal contract to which the guaranty relates. The note expressed the absolute obligation of the maker to pay the cum named at the specified date of maturity or before. The guaranty of “the payment of the within note” imported an undertaking, without condition, that, in the event of the note not being paid according to its terms, — that is, at maturity, — the guarantor should be responsible. The non-payment of the note at maturity made absolute the liability of the guarantor, and an action might at once have been maintained against him without notice or demand.* Such was the effect of the unqualified guaranty of the payment of an obligation which was in itself absolute and perfect and certain as respects the sum to be paid, and the time when payment should be made, — all of which was known to the guarantor, and appears upon the face of the ■contract. The liability of the guarantor thus becoming absolute by the non-payment of the note, the neglect of the holder to pursue such .remedies as he might have against the maker (the guarantor not hav [308] ing required Mm to act) would not discharge the already fixed and' absolute obligation of the guarantor, nor would neglect to notify the guarantor of the non-payment have such effect. Brown v. Curtiss, 2 N. Y. 225; Allen v. Rightmere, 20 John. 365, (11 Am. Dec. 288;) Newcomb v. Hale, 90 N. Y. 326; Read v. Cutts, 7 Greenl. 186, (22 Am. Dec. 184; Breed v. Hillhouse, 7 Conn. 523; Campbell v. Baker, 46 Pa. St. 243; Roberts v. Riddle, 79 Pa. St. 468; Bank v. Sinclair, 60 N. H. 100; Heaton v. Hulbert, 3 Scam. 489; Dickerson v. Derrickson, 39 Ill. 574; Penny v. Crane Mfg. Co., 80 Ill. 244; Clay v. Edgerton, 19 Ohio St. 549; Wright v. Dyer, 48 Mo. 525. See, also, Vinal v. Richardson, 18 Allen, 521, modifying former decisions of tM? same court. It follows that the fact that the maker had become insolvent since-maturity, or that a mortgage security had become impaired by depreciation in the value of ¡the property, was no defence; nor was it a defence that the guarantor was not notified of the non-payment of the note. We are aware that the position here taken is opposed by some-decisions. No valid agreement was shown between the maker and the plaintiff extending the time of payment. From the position above taken, it logically follows that the neglect of the guarantee to take the steps necessary to fix the liability of the indorser, Gage, did not discharge the guarantor. The latter, by his unqualified guaranty of the payment of the note, took it upon himself to see that the note was paid, and was therefore not entitled to notice of its non-payment. (Authorities above cited.) For the same reason, the plaintiff did not owe to the guarantor the duty of taking the steps necessary to fix the contingent liability of the indorser by demand and notice of dishonor. Philbrooks v. McEwen, 29 Ind. 347; Lang v. Brevard, 3 Strob. Eq. (So. Car.) 59; Pickens v. Finney, 12 Smedes & M. 468; 2 Lead. Cas. Eq., notes to Rees v. Berrington. No such obligation is involved in. this contract of guaranty. Even in the case of an ordinary indorsement, the holder, at maturity, is under no obligation to his indorser to give notice of dishonor to prior indorsers or parties/ The last in-dorser becomes liable when he alone is notified, and he in turn may fix the liability of prior parties by giving notice to them. Order affirmed. Footnotes [1] Berry, J., because of illness, took no part in this case.