Westchester Mortgage Co. v. Thomas B. McIntire, Inc.

The complaint was dismissed at the opening of the trial on the ground that it did not state facts sufficient to constitute a *140cause of action. The action against Foster is upon his guaranty of the payment of a promissory note. The complaint alleges the execution and delivery by the defendant company to plaintiff of its promissory note for $1,000, dated March 20,1914, and payable at the Mount Pleasant Bank of Pleasantville, N. Y., in sixty days after its date, accompanied by a written guaranty executed by the respondent and the defendant Mclntire in the following language:

“ This is to certify that the undersigned, for value received, hereby guarantees Westchester Mortgage Company against loss or damage by reason of the non-payment of a note for One thousand ($1,000) dollars, dated on or about March 20th, 1914, made by Thomas B. Mclntire, Inc., to Westchester Mortgage Company, payable sixty days after date with interest, and the undersigned guarantees the payment of said note and guarantees Jonathan Holden against suffering any loss or damage by reason of his guaranty or indorsement of said note or by reason of the non-payment of said note. It is hereby consented that the time for the payment of said note may be extended by one or more extensions, provided such time of payment is not extended to a time later than August 30, 1914, and it is consented that such extension be without notice to the undersigned.

“ Dated March 20,1914.

“WM. H. FOSTEE,

“ THOMAS B. McINTIEE.”

It is alleged that in consideration of the guaranty, and relying thereon, the plaintiff indorsed said note for the accommodation and benefit of the maker and for the purpose of enabling it to secure from the bank where it was made payable a loan for $1,000; that the Mount Pleasant Bank discounted such note and paid to its maker, the defendant company, said sum of $1,000; that the defendants failed to pay said note at its maturity and have never paid it, and that in May, 1914, said bank, for value, sold, assigned and transferred to plaintiff all sums due and to become due thereon.

I am unable to see why this complaint does not state a good cause of action against the respondent as a guarantor. It is contended, however, by the respondent that “ the guaranty was *141against loss or damage by reason of the non-payment of the note,” and “ being one of collection and not of payment, the complaint does not state facts sufficient to constitute a cause of action, in that there are no allegations therein showing- that plaintiff has exhausted his remedy against the maker of said note.” The general rule of law stated has no application to the facts presented by the case at bar, for the reason that the guaranty, in addition to being a promise to indemnify plaintiff against loss or damage by reason of the non-payment of the note, is an absolute guaranty of its payment which makes the guarantors liable to the holder of the note if the maker failed to pay it at maturity. (Catskill Nat. Bank v. Dumary, 206 N. Y. 550.) The guaranty accompanied the note and is enforcible by the person who could enforce payment of such note. (Claflin v. Ostrom, 54 N. Y. 581; Lawrence v. Fox, 20 id. 268; Riordan v. First Presbyterian Church, 6 Misc. Rep. 84; 20 Cyc. 1429.) It was not necessary, therefore, to allege an assignment of the guaranty to the bank or its reassignment to plaintiff, or that the transfer to plaintiff was made upon its faith. The complaint sets forth the guaranty in full; the plaintiff is entitled to the benefit of its every feature and its full legal effect (Code Civ. Proc. § 534), and if susceptible of conflicting interpretations the one most favorable to the plaintiff must be adopted. (Smith v. Molleson, 148 N. Y. 241; Gamble v. Cuneo, 21 App. Div. 413.) The guaranty being for the payment of the note, it was not necessary to allege presentment, demand, protest or notice irrespective of whether the note was owned at maturity by the bank or by the plaintiff. (Fidelity & Casualty Co. v. Wells, 49 App. Div. 171; Allen v. Right-mere, 20 Johns. 365; Brown v. Curtiss, 2 N. Y. 225.)

The judgment must be reversed and a new trial granted, costs to abide the event.

Jenks, P. J., Thomas and Stapleton, JJ„, concurred.

The parties hereto having stipulated in open court that this case may be disposed of by a court of four, the decision is as follows: Judgment reversed and new trial granted, costs to abide the event.