Ellenwood v. Fults

There was a conflict of evidence as to whether or not the defendant ratified the act of his son in signing his (the defendant’s) name to the $500 note, and the finding on that question must be held conclusive.

The defendant moved for a nonsuit, .on the ground that there was no sufficient proof of the loss of the note. The court denied the motion, and the defendant’s counsel now insists that the judge erred in denying the motion. The loss of the note is alleged in the complaint' and denied in the answer. The plaintiff was therefore apprised that he must prove the loss by legal evidence. To prove the loss, the plaintiff himself testified that he let them (the defendant and his son Chauncey meaning) take and show the note (the $500 note) to a neighbor to see if the indorsement (of one half the amount due thereon) was right. “I let Chauncey have the note; they were gone some time, and Chauncey returned in about three hours and said he had lost the note, and I have not seen it since.” This is all the evidence in regard to the loss, at the time the plaintiff rested. It is the declaration of Chauncey, and as a general rule his declarations would not be evidence against *331the defendant. But it will be seen that Chauncey and David were both participants in the proceedings to effect a settlement of the $500 note. They were both parties to that note, and interested in the settlement—particularly in having it indorsed down so as to protect them; Chauncey and David have the note to take to a neighbor to see if the indorsement was right. “ They were gone,” he further says, and Chauncey returned, &c. It seems to me that on this evidence it is fair to infer that Chauncey acted, in consulting a neighbor as to the validity of the indorsement, not only for himself but as agent for the defendant, and that his statement on his return was admissible against the defendant. And the jury might find, on this evidence, that the note was lost. The defendant himself, when examined in his own behalf, swears to the same statement of his son, as to the loss. I think the learned justice rightly refused to nonsuit the plaintiff on this ground.

This brings us to the principal question in the case; whether the $500 note was satisfied by the new agreement made on the 27th of August, 1861.

Thé $500 note was given in part payment for a- scow purchased by Chauncey Fults of the plaintiff. That note was dated on or about the- 24th of April, 1860, and payable with interest 19 months from its date. The note matured in November, 1861 Chauncey had sold the scow to the Holdridges and taken from them a personal mortgage conditioned to pay the $500 note. The plaintiff, for some reason, became uneasy in regard to his note, and desired some new arrangement as to it. Negotiations were consequently had with Chauncey in which, it would seem, jt was agreed between them, subject to the defendant’s approval, that if. Chauncey and the defendant would give a new note for one half the amount due upon the old, procure a release from the Holdridges of all claims against said scow, and one half of all other claims, the plaintiff would pay the other half of all such claims other *332than those of the Holdridges, take back the scow and surrender the $500 note. This proposition was communicated to the defendant and assented to by him ; the only variation in the arrangement being that the defendant was to guaranty the note for one half the $500 note, and sign an agreement in relation to the payment of the claims on the vessel. The new note was drawn by the plaintiff and signed by Ohauncey and a guaranty thereof signed by the defendant, and an agreement made to pay charges against the scow; the plaintiff indorsed the amount of the new note on the $500 note, and left. Strough, a witness on behalf of the defendant, says that after these things were done the plaintiff declared himself satisfied. To complete this arrangement it was of course necessary that the scow should be given up to the plaintiff, and neither then nor subsequently was any complaint made by the plaintiff' that the scow had not been delivered. The plaintiff 'on the trial, is silent on the subject, and it therefore seems to me that we must assume, for the purposes of this case, that the scow was delivered. The plaintiff proves the new agreement, testifies as to performance by the parties, and it was only in the contingency that the defendant broke this contract that the plaintiff could be remitted to his remedy on the $500 note. Proof of a breach by the defendant was a part of his case. The breach relied on is the invalidity of the guaranty of the new note, not the non-delivery of the scow. From the omission, throughout the trial, to allege that the scow was not returned to the possession of the plaintiff' and the allegation of a breach of another and different clause of the contract, I think we are bound to consider the case as if a delivery of the scow to the plaintiff had been proved.

The defendant performed his part of the new agreement, when he signed the new agreement to pay the charges against the scow, and surrendered her to the plaintiff) except giving a valid guaranty of the new note, if it *333be true that the one given is not, in law, binding upon him.

Before proceeding to examine that question, let us ascertain whether it was the intention of the parties that the note signed and guarantied, and the scow delivered up, the agreement to pay the charges on her, executed by the defendant and delivered to the plaintiff, constituted full performance on the part of the defendant; or whether the $500 note was not to be deemed paid until the charges were in fact paid, in addition to the performance of the other considerations of the contract. The payment of these charges was demanded by Moon at the time he called on the defendant before suit was brought, and hence I infer that the giving of an agreement to pay was not deemed to be a performance of the contract.

No such position can be maintained. When the acts above enumerated were done by the defendant, they were accepted as performance of the contract. The plaintiff says the $500 note was to be held to the extent of one half of its amount till the charges on the scow were paid. In this Í think he is mistaken. The one half of the note would be no more available to him than the agreement required by the defendant to pay the charges, and no other witness testified to any such provision. Again; it seems that during the negotiation it was proposed to indorse the old note down to one half its amount, and to let the other half remain available to the defendant, instead of taking a new note. But the plaintiff was not satisfied with the old note, by reason of the doubt as to its being binding on the defendant, and hence the new note for the one half was given. And according to the testimony of Strough, it was after the loss of the old note, and the consequent discharge of the defendant from liability thereon, as the plaintiff then supposed, that upon the completion of the new arrangement, he expressed himself satisfied therewith.

It seems to me, therefore, that the new agreement was *334substituted for the old note, and that if the defendant has, in law, fulfilled that contract on his part, he is relieved from liability on the $500 note; and if he has not, then he is liable upon the new agreement for whatever damages the plaintiff has sustained thereby. And I repeat, that giving the agreement to pay the charges on the scow, was a performance of the clause of the new contract in relation thereto.

The plaintiff was entitled, under his contract, to a valid guaranty of the new note; and the defendant is not released from liability if the plaintiff, through mistake, failed to draw a guaranty binding in law.

The fair construction of the contract is, that the defendant should not only sign a guaranty, but one that could be enforced in law against him. The only effect that the plaintiff’s mistake could have, would be to excuse the defendant from liability for a breach of contract, until demand was made upon him to execute a valid one, and refusal to comply.

Is the guaranty, in law, binding on the defendant ?

In considering this branch of the case, it must be assumed, on the finding of the jury, that the defendant did execute, and was liable upon, the $500 note. As between the plaintiff and defendant, the latter was indebted to the former in the amount of the note. It was the debt of the defendant as well as of his son Chauncey. It is true the defendant was a mere surety, as. between himself and his .son. But the defendant’s relation to the plaintiff was not affected thereby. He was a joint and several debtor with his son upon that note.

When negotiations were entered into to pay that debt they were entered into to pay his own debt, and not the debt of another. The cases of Brewster v. Silence, (4 Seld. 207,) Church v. Brown, (29 Barb. 486,) and divers other, kindred cases referred to by the counsel, have no application to this case. In those cases the defendants were in no way responsible for the debt until they signed their *335respective contracts of guaranty. In this case the defendant was legally liable, before signing the guaranty, for the whole debt, and was therefore guarantying his own debt, and not the debt of another. Brown v. Curtiss (2 Comst. 225) lays down the rule which governs this class of cases; and until the doctrine of that case is overruled, this guaranty must be held valid and binding.

But if we are wrong in this, still the judgment in this case could not be sustained. The plaintiff had received and retained a part of the consideration of his promise to release the defendant from the $500 note. He could not keep it and still recover the whole amount of the note. He was entitled to recover only so much as he lost through the default of the defendant to fulfill his part of the agreement. That was limited to the new note; all the rest had been performed. That note and its interest formed the measure of damages.

I am of the opinion that two of the defendant’s exceptions to the judge’s charge were well taken, and the judgment should be reversed, and a new trial granted ; costs to abide the event.

Allen, Mullin, Morgan and Bacon, Justices.]