Baldwin v. Ludwig

The estate of E. Y. Loew owned the Hotel Brunswick, in which there was a restaurant. The defendant Ludwig Catering Company applied for the privilege of operating the restaurant, and obtained it upon procuring the execution by the individual defendants of the following instrument of guaranty: ‘ ‘ In consideration of the sum of one dollar, and other good and valuable considerations to each of us in hand paid by the Estate of E. V. Loew, the receipt whereof is hereby acknowledged, we do hereby jointly and severally guarantee, promise and agree to and with the said Estate of E. Y. Loew that the Ludwig Catering Co. the corporation named in the within contract, will promptly pay all bills and accounts contracted in the conduct of its business. And we do jointly and severally waive and dispense with any demand on *311said Ludwig Catering Co. and any notice of nonperformance on its part.”

The plaintiff and his assignor, tradesmen who furnished goods to the Ludwig Catering Company upon credit, were not paid, and this suit is brought against the corporation and the individuals who signed the guaranty. The amount of the debt due by the corporation, its non-payment, and the execution of the guaranty are admitted, and it is conceded that the judgment against the catering company was well rendered; but the individual defendants contend that it was error to give judgment against them, and we think they are clearly right.

The plaintiff claims that the contract of guaranty was made at least in part for the benefit of those extending credit to the catering concern, and that they may sue upon it under the doctrine of Lawrence v. Fox, 20 N. Y. 268. The doctrine has not been so extended. See Seaver v. Ransom, 224 N. Y. 233. There was no privity between the promisee, the estate of E. Y. Loew, and the tradesmen creditors of the catering company. The promisee was under no obligation to persons in plaintiff’s situation, and quite plainly its exaction of the guaranty was not to advantage possible future creditors of the catering company, but to satisfy aims of its own, the precise nature of which we do not think it is necessary to inquire into. The plaintiff and the other creditors of the catering company were mere strangers, and they are not entitled to sue upon the guaranty. Vrooman v. Turner, 69 N. Y. 280. The rule of the cases that have allowed a recovery by a member of the public in whose interest a contract has been made by a municipality (Schnaier v. Bradley Contracting Co., 181 App. Div. 538; Seaver v. Ransom, supra), is, of course, inapplicable.

*312Judgment reversed, as against the individual defendants, with thirty dollars costs, and complaint dismissed as to them with appropriate costs in the court below.

Guy and Weeks, JJ., concur.

Judgment reversed, as against individual defendants, with costs.