Clune v. Ford

This is an action upon a written guaranty in these words:

“New York, October 27,1888.

“Mr. Mathew Clune, Proprietor Vanderbilt Hotel—Dear Sir: We hereby agree to guaranty the expenses of the members of the Gaelic Athletic Association to the sum of $650, (six hundred and fifty dollars,) or the amount due under that figure. Patrick Egan, Lincoln, Neb.

“Patrick Ford. “ “ ”

*720At the time of the execution of this instrument, Olune was the proprietor of a hotel in Hew.York city at which the members of the Gaelic Athletic Association were boarding, and they were in arrears for such board in the sum of about $475; and they lived at the hotel, and incurred expenses there, after the delivery of the guaranty, to the amount of $175. There being no disputed facts at the trial, a verdict was directed by the judge"for the, plaintiff for the full amount of the guaranty; and the defendants have appealed.

If the language employed can be allowed-the full force of its unequivocal meaning and signification, there will be no difficulty in the disposition of the appeal; for the defendants plainly expressed their intention to guaranty to the plaintiff the payment to him of the expenses of the association at his hotel to the amount of $650, or the amount due under that sum. We must see, however, whether such intention, so expressed, can be carried into execution, or whether it will be defeated by any technical rule'of law. In its commercial sense, a “guaranty” is. an undertaking by one person to be answerable for the debt or obligation of another; and it is essential to its validity that it shall be based upon a sufficient consideration. In cases like the present, where the collateral undertaking is subsequent to the creation of the debt, and was not the inducement to it originally, there must be some further consideration shown having an immediate respect to such liability. It is now no longer necessary, in this state, to express a consideration in a writing containing a promise to answer for' the liability of another, (Laws 1863, c. 464;) yet it is indispensable that a consideration shall exist to effectuate the promise, (Bank v. Kaufmann, 93 N. Y. 279.) We think there was proof here of a sufficient consideration to uphold the guaranty in question. The terms of the instrument are unrestricted, and the agreement is to guaranty the expenses of members of the association. The language applies équally to future and to past expenses, and $175 of expenses were incurred' after the delivery of the promise; and in the case of a special guaranty, like this, the consideration necessary for its support may be furnished by the promise to the principal or to some third party, according to the terms of the guaranty. 93 N. Y. 279, supra. In this case, according to the very terms of the writing, and the legitimate inference from, and the circumstances which cluster around, the transaction, the consideration for the support of the promise was to be furnished by the plaintiff to the members of the athletic association. Considerations, at tile common law, are of two kinds,—one whose benefit accrues to him who makes the promise; and the other, where loss or disadvantage accrue to him to whom it is made, at the instance of the promisor, although without benefit to the latter; and either one is sufficient to sustain a promise. 1 Pars. Cont. 431. In this case, loss came to the plaintiff from the guaranty, because upon that instrument he furnished $175 of the amount now claimed. We think such consideration imparts validity to the guaranty to the whole amount named in that instrument. The contract was entire, and guarantied the payment of all the expenses of the association, and only required the element of considerar tian to make it binding and effectual; and when that was furnished it imparted life and vitality to the whole instrument, and made it a living, legitimate obligation, in the hands of the plaintiff, to .the extent of $650, the limitation stipulated in the paper. The judgment should be affirmed, with costs. • "