Cox v. Weed Sewing Machine Co.

George, C. J., delivered the opinion of the court. W. P. Gibson, A. O. Cox, and J. B. Deason, on Nov. 13, 1876, executed their joint and several bond to the defendant in error in the penalty of one thousand dollars, with a condition as follows: “ That if the above bounden W. P. Gibson, his heirs, &c., shall well and truly pay, or cause to be paid, any and every indebtedness or liability now existing, or which may hereafter in any manner exist, or be incurred on the part of the said W. P. Gibson to the said Weed Sewing Machine Company, whether such indebtedness or liability shall exist in the form of book accounts, notes, renewals or extensions of notes or accounts, acceptances, indorsements, guaranties, assignments, or otherwise (hereby waiving presentment for payment, notice of non-payment, protest and notice of protest, and diligence upon all notes now or hereafter executed, endorsed, transferred, guaranteed, or assigned by the said W. P. Gibson to the said Weed Sewing Machine Company), then this obligation to be void; but otherwise to remain [354] in full force and effect. This to be a continuing guaranty by each of the above parties until after notice in writing shall have been given to, and actually received „by, the said Weed Sewing Machine Company from each.” The declaration assigned as a breach of the condition of the bond, that, on Nov. 15, 1876 (two days after the date of the bond), the said Gibson became, and was, indebted to the plaintiff in the sum of four hundred and fifty-five dollars, and on said day executed to the plaintiff his promissory note for the same, payable at the end of four months from that time; and, as a further breach, it was averred that on said Nov. 15, 1876, the said Gibson became indebted to the plaintiff in the sum of one dollar, for sewing-machine oil then sold by the plaintiff to him. It was averred further that neither said Gibson nor the other defendants have paid said debts; by reason whereof the defendants became liable to pay the same. The defendants Cox and Deason pleaded separately, — 1. 1Von damnificatus; 2. That the said bond was delivered by them to the said Gibson, and not to the plaintiff, and that they had no notice of the acceptance of said bond by the plaintiff until long after the maturity of the note mentioned in the declaration ; 3. That they had no notice of the indebtedness of Gibson mentioned in the declaration until long after it fell due; 4. A plea setting out the facts pleaded in the second and third pleas. The plaintiff demurred to the second, third, and fourth pleas, and replied to the first, and the demurrer was sustained. The defendants Cox and Deason, under leave, filed several other pleas, and among them the following: 2. The mailing of notice to the plaintiff not to let Gibson have any machines, and this before any machines were delivered ; 3. That the note of Gibson mentioned in the declaration is without any consideration whatever; 4. That the plaintiff had no porver to make the contract sued on. The plaintiff’s demurrer to these pleas was also sustained. A verdict was rendered against the defendants on the issues made by the other pleas, for the amount of the note and interest. Cox and Deason, sued out this writ of error, and assign that the lower court erred in sustaining the demurrers to the pleas and refusing to extend them back to the declaration. [355] It is here insisted that the instrument sued on was a guaranty, and that notice of its acceptance by the plaintiff, and of the credit given under it, should have been given to the sureties, Cox and Deason. We do not consider the instrument sued on a guaranty, in the sense in which it has been held that a guarantor is entitled to notice of its acceptance and of the credit given under it. A guaranty has been defined to be a collateral engagement to answer for the debt, default or miscarriage of another person. De Colyar on Guaranty, 1. Brandt, in his excellent work on Suretyship and Guaranty, § 1, says: “ A surety or guarantor is one who becomes responsible for the debt, default, or miscarriage of another person. The words ‘ surety ’ and ‘ guarantor ’ are often used indiscriminately as synonymous terms ; but while a surety and a guarantor have this in common, that they are both bound for another person, yet there are points of difference between them which should be carefully noted.” And, proceeding to point out this difference, the same author says : “ A surety is usually bound with his principal by the same instrument, executed at the same time and on the same consideration. He is an original promisor and debtor from the beginning. . . . On the other hand, the contract of the guarantor is his own separate undertaking, in which the principal does not join.” Tested by these rules, the defendants, Cox and Deason, would not be guarantors. They are joint obligors with Gibson, and not separate contractors. Their contract and liability are exactly the same as Gibson’s. They bound themselves to do exactly what Gibson bound himself to do, neither more nor less. No breach of the bond can occur as to Gibson which is not equally a breach as to them, and what is a good performance as to Gibson is equally good as to them. Their promise is joint and several with Gibson’s, — original as his is, and not collateral to it in any sense whatever. Their counsel admit that, as to this bond, they are the sureties of Gibson, and not guarantors. But it is further insisted that they are sureties on this bond ; that the instrument itself is a guaranty; and that they are therefore but sureties on a guaranty, and are entitled to all the privileges allowed bylaw to guarantors. The argument is plausible and ingenious, but unsound. If they are sureties in [356] an instrument of guaranty, Gibson is the principal, which would make Gibson the guarantor of his own debt, which would be absurd ; for it is of the essence' of a guaranty that the guarantor should become responsible for the debt, default, or miscarriage of another. Since, therefore, the principal obligor in the bond cannot be a guarantor, the instrument cannot be a guaranty; and the defendants, Cox and Deason, must be sureties merely, and not guarantors. Their true relation is that of sureties to Gibson in the contract sued on; that is, they have undertaken, with Gibson, to perform that contract for his benefit. Their obligation, it is true, is to be responsible for the debt, default, or miscarriage of Gibson; not, however, by a collateral and separate agreement, but in the same instrument, and only so far as that debt is created in that instrument, or the default or miscarriage may be occasioned by a noncompliance by Gibson with its terms. In testing their liability under it, we are first to ascertain the liability of Gibson under the same instrument. When that is fixed, their liability is also fixed. It being impossible for Gibson to be a guarantor for himself, he is not entitled to notice of the acceptance of the bond by the obligee, or of any subsequent advances under it. If the fact that the bond is a security for the debt, miscarriage, or default of Gibson makes it a guaranty, then every official bond of a public officer, every attachment and replevin bond, and every injunction bond and appeal bond would be guaranties ; for they are all undertakings for the debt, default or miscarriage of the principal obligor. The Supreme Court of Indiana reached a similar conclusion, respecting a bond substantially the same as the one in controversy, in the case of McMillan v. Bull's Head Bank, 32 Ind. 11. We think the demurrer to the third plea of the defendants pleaded on respondeat ouster ought not to have been sustained. The plea contained a good answer to the entire action, except one dollar, and the plaintiff did not assign, as cause of demurrer that the plea professed to answer the whole action, while in truth it only answered a part. If the note, the non-payment of which is assigned as a breach of the bond, was without consideration, no recovery could be had on that account. The demurrer to this plea is ordered to be overruled. The de [357] murrer to the second plea filed under judgment of respondeat ouster was properly sustained. As to the plea of ultra vires, it is only necessary to say now, that, if allowable at all, — about which we express no opinion, — the demurrer was properly sustained to it, because it failed to name which one of those contracts mentioned in the declaration was without the power of the corporation, and because, also, the plea fails to state wherein and in what respect the contract was ultra vires. Judgment reversed and cause remanded.