Bushnell v. Church

15 Conn. 406

• Court: Supreme Court of Connecticut
• Decided: June 15, 1843
• Status: Published

Opinion

Williams, Ch. J.

The defendants claim that they are not liable on this guaranty, because Bushnett did not give them notice of his acceptance thereof; and rely upon the case of Graft v. Isham in support of this claim. If this contract falls within the principles of that case, it must be governed by it; for we have no reasons to be dissatisfied with the authority of that case. That was strictly a commercial guaranty", or a mere offer or proposal to guaranty, in which case notice must be given. We do not think this is a case of that character. Here, the plaintiff was actually at work for William Church, digging ore; he refused to proceed with his work; unless said William would procure the guaranty he had promised ; and under these circumstances, William Church procured one of these defendants to put into writing his contract with the plaintiff, dated 9th of May, 1839 ; and the defendants execute upon the back of it a writing of guaranty of performance, of the same date ; which writing was signed and handed to a witness to deliver to the plaintiff. We cannot consider this as a mere offer to guaranty, founded upon a future acceptance by the plaintiff. But the situation of the parties, the date of the contract, as well as its terms, all concur to show, that it was intended as a contemporaneous act on the part of all concerned. When it was drawn, Bushnell was labouring under contract with William Church. Upon that contract, he claimed, he was to have a guaranty, and enforced this claim, by threatening to withdraw from it, William Church then procures the contract to be put in writing; by the terms of which, the existing agreement between the plaintiff and William Church is recognized ; for it was agreed, that security should be given as well for what had been done, as what was promised to be done by the plaintiff, in digging this ore. When then this contract was signed, and handed to the plaintiff, it must have been intended, that it should be for security for his past, as well as for his future services ; and the defendants certainly must have understood, that this was in compliance with a previous contract. There was, indeed, no evidence when the plaintiff signed the contract; and we do not think such evidence was necessary. If he never signed, it could be of no importance; for his claim against Church was made to depend entirely upon performance, on his part. But if his signature was important, the fact that the writings all bear one date, is prima facie evidence that it was all one transaction, unless the contrary is proved; and-no such proof is before us. Instead then of being a prospective commercial guaranty, like that in Craft v. Isham, it much more resembles the case of The New-Haven County Bank v. Mitchell, decided at the last term, where it was held, that the delivery of the instrument was not an incipient step in the formation of the contract, but the result of previous negotiation and agreement, and constituted the very consummation of the contract. 15 Conn. Rep. 219. The case of Wilder v. Savage, recently decided in Massachusetts, by the learned judge of the supreme court of the United States, also bears upon this, as well as other points in the case. There, Bruce wanted from Mr. Austin, a credit upon the plaintiff for 200/., which Austin agreed to give, if the goods procured should be consigned to the plaintiff. Bruce would also furnish a personal guaranty for 500/. The defendant gave this guaranty; and the letter of credit was given upon which this suit was brought; and judge Story, fully admitting the law as to the necessity of notice upon a guaranty for future advances, held, that it was inapplicable to that case ; for the agreement to accept was contemporaneous with the guaranty, and indeed constituted the consideration and basis thereof. 1 Story’s R. 32. We think, therefore, that this objection cannot prevail.

2. But it was claimed, that the plaintiff had not proved a demand upon William Church, and notice to the defendants that he had not performed. It was claimed, on behalf of the plaintiff, that he had proved, by one Norton, that he made demand of payment of William Church, in May, 1840, and soon after, of the defendants. The defendants claimed, that no notice was given them of the demand upon William Church, nor of the quantity of ore dug by the plaintiff, and prepared for market, and sold. Upon this point, the jury were instructed, that if they believed Norton’s testimony, and that security was given to the defendants against this very claim, no further notice was necessary. This was done to give the plaintiff the advantage which he claimed from that testimony.

The objections were, that they were not apprised of the extent of the plaintiff’s demand, nor that William Church had been called upon.

As to the first, we know no rule which requires the plain* -tiff to present the defendants, with the particular amount clue. It was formerly held, by the superior court, that before one town could sue another for supplies for a pauper, they should exhibit a bill of these supplies in writing; but this court decided, that this was not necessary — reasonable notice only should be given. Newton v. Danbury, 3 Conn. Rep. 559. If therefore, any notice was necessary, it cannot be claimed, that the amount need to be shewn, unless the defendants admitted a liability to pay as guarantors.

But it is claimed, that the defendants should have been informed, that Church had not paid, and that demand had been made on him for payment: in other words, that the same strictness of notice, except as to time, is required, in such a case, as upon a bill of exchange. The defendants became guarantors, not only of the solvency of William Church, but that he should perform his contract. The demand upon them to pay, imported a notice that he had not performed his contract, and was a reasonable notice. But no notice was necessary. It was their duty, as sureties, to see that the principal performed. This subject has been so recently discussed, in the case of Hammond v. Gilmore's Admr. 14 Conn. Rep. 479. as not to call for further remark. There, Olmsted contracted to deliver to Hall and others certain trees growing on his land, next fall; Hall to pay 20 cents for each tree ; and if either party failed, to pay 3000 dollars. Gilmore guarantied the payment by Hall. There was no evidence that Olmsted ever gave Gilmore, or his administrator, notice of Hall’s failure to perform his contract, or that he had performed his; and this court held, that it was not necessary ; that Gilmore was privy to the contract made by Hall, and was bound to ascertain for himself whether a forfeiture against which he had stipulated, had been incurred. 14 Conn. Rep. 486. We are not able to distinguish the case before us upon this point from that.

If, however, notice was necessary, the rule in the case of negotiable paper as to demand and notice, has but a feeble and qualified application to a guaranty. In the former case, says Judge Kent, the want of demand and notice will prevent a recovery, unless the plaintiff can show some legal excuse; but in the case of a guaranty, the rule is, that the want of notice must have produced some loss or injury to the guarantor. 3 Kants C. 123. So it has been held, in a variety of cases, in Great-Britain, and our sister states. Warrington v. Furbor, 8 East, 242. Swinyard v. Bowes, 5 Mau. & Sel. 62. Oxford Bank v. Haynes, 8 Pick. 423. Gibbs v. Cannon, 9 Serg. & R. 202. Van Wart v, Wooley & al. 3 B. & Cres. 439. (10 E. C. L. 145.) The recent decisions in the courts of the United States, make it unnecessary to cite other authorities. The rule is well settled, that the guarantor, even of a promissory note, whose name does not appear on the note, is bound without notice, where the maker was insolvent at its maturity. There must not only be a want of notice, but there must be some loss or prejudice sustained thereby. Reynolds v. Douglas, 12 Pet. R. 497. Wildes v. Savage, 1 Sto. R. 22. And it would seem from these authorities, that the defendant, before he can insist upon this want of notice, must prove it has been some prejudice to him ; for in Reynolds v. Douglas, the court say7 his liability continues, unless he cao show he has sustained some prejudice, by want of notice of a demand ontthe maker and non-payment; and in the last, case, Judge Story says, “ It is not shown, nor as far as I know, is it pretended in argument, that notice punctually would have been of any advantage to the defendant, or that he has sustained any damage thereby7.” On this point, therefore, the defendants cannot object to the charge.

In connexion with this point, we notice an objection which was taken to the copy of a deed of William Church to the defendants, to prove the time of his insolvency, which was objected to and admitted. The proof of William Church’s insolvency had been admitted, without objection. The plaintiff wanted to prove when he became so ; and the defendants objected to the admission of this deed as immaterial and irrelevant, tending to prove no fact of importance in the case. The plaintiff claimed, that insolvency being proved, the time of such insolvency might also be proved ; and that there having been no objection to the proof of insolvency, they ought not to object to the proof as to the time of insolvency ; and further, that the fact that William Church being insolvent, before the time of the performance of this contract, and conveying his property to indemnify the defendants against it, they could not complain of the want of notice. ^ter having denied that the principal was insolvent when ⅛⅛ contract came to maturity, it certainly became proper, if not necessary, for the plaintiff, when the defendants claim-e(j jla¿ no notice, to show they had not suffered damage from the want of it, or that the damage was trifling. And the insolvency of William Church, together with the fact that he had conveyed to them property to secure them against this very claim, was all important to the plaintiff, if the notice was not sufficient; and the time of the insolvency was important, to show that it happened before the time when the plaintiff's claim arose. We can, therefore, see no valid objection to this evidence.

The plaintiff also offered testimony to show, that soon after he began to labour under this guaranty, William Church made sale of 600 tons of the ore, and came to him, and informed him of this fact, and directed him to dig and sort the same for market, as soon as possible. The defendants objected to the declarations of William Church, claiming, that they did not prove the fact of a sale — at all events, not as against them ; that the evidence was merely hearsay ; and William Church ought to be called as a witness. The court, however, admitted the testimony. That this would have been proper evidence against William Church, if the suit had been against him, there can be no doubt; and if the defendants had signed the obligation with him, as surety, instead of warranting his performance, it would have been proper as against both.

It is said, however, that as William Church is neither party nor witness, his declarations are not evidence against these defendants ; and it is insisted, that they warranted he should pay for the ore he had sold, not that which he said he had sold. To determine the weight to be given to this argument, we must look at the relative situation of these parties. William Church hires Bushnell to dig ore as fast as he wants it, and can sell it; and is to pay him only on condition that Bushnell complies with his contract; and the defendants guaranty that William Church shall perform ; in other words, they will pay, if he should be bound to pay, and does not. William Church, then, is the man, whom all the parties agree to look to, as the person to receive and sell the ore, and to direct how fast it shall be got out. Bushnell, to comply with this contract, must get it out as fast as William Church sells it, or he can have no claim. How is he to know how fast Wil-Ham Church wants it got out, otherwise than by the orders or directions of William Church? Supposing William Church directs him to hasten the work, for he has sold the ore; would it be a sufficient reason for Busknell’s delaying the work, that he had no proof that Church had actually sold the ore ? As between these men, must it not be sufficient evidence of the fact of sale, that he for whose benefit this clause in the contract was introduced, directed the man he had employed to go on, for he had made the sale ? Would not Church be forever estopped from denying it ? Would he be admitted to say, that the plaintiff went on, confiding in his word, but he deceived him, or was himself deceived or mistaken ? Who ought, in justice, to bear the consequence of such a mistake ? There can be but one opinion.

Bushnell is labouring under William Church’s directions, and to receive payment only in case he follows them, with a right, however, if in his opinion, his interests require it, to stop, after notice given. Lulled into security, by the information of William Church, that he has sold the whole quantity, he refrains from giving notice, raises the whole quantity, and when he calls for his pay, is told, that William Church was mistaken — that he thought he made the sale, but it has turned out otherwise. The man denies it, and he has no evidence of it. Who shall bear this loss ? The man, who, by his direction, has been induced to do the work, or the man who directed him to do it, under the affirmation that the. sale was made ? William Church must be estopped, as much from averring he had made a mistake, as from averring he had told a falsehood ; for the mistake, though not as criminal, is precisely as injurious to him who was the subject of it. An estoppel by an act in pais, is as complete as by a deed. An acceptance of a lease, by a man, or an acknowledgment that a certain woman is his wife, will bind the one accepting the lease, as tenant, or the other, as husband. 2 Esp. Ca. 637. 3 Conn. R. 47. So if a person represents himself as owner, it is immaterial whether he was so or not: having so represented himself, he is responsible to that extent. Helme v. Smith, 7 Bing. 709. [20 E. C. L. 300.] So if one stands by, and sees his land sold at auction, and encourages another to bid, he shall be estopped from controverting the validity of the sale. Helme v. Smith, ut supra. 7 S. & R. 467. So where one gave to another a bill of parcels of certain goods, with a certificate that he held them on storage, he was estopped to say he never had such goods. Chapman v. Searle, 3 Pick, 38. Bonaffe v. Woodberry, 12 Pick. 456. So if a medical man passes himself off as a physician in England, he can maintain no action for his fees ; for, says Lord Ellenborough, he must lake the character cum onere. Lipscombs v. Holmes, 2 Campb. 441. So, where property being libelled in the admiralty court, the plaintiffs procured their clerk to claim it as his own, and then brought a suit for the proceeds. It was held, the plaintiffs were estopped, by their own act, in setting up and establishing the defendant’s claim in a court of admiralty, from now turning round and insisting that it was their own. DeMetton v. DeMello, 12 East, 234. S. C. at Nisi Prius, 2 Campb. 420. It is said, that though these declarations are admissible against William Church, yet they are not admissible against the defendants. As confessions of William Church, they may not be admissible, and on the trial, the confessions were ruled out ; but his declarations accompanying his directions to get out the ore, were received as part of the res gestes. The declarations of an agent, acting in the course of his business, are constantly admitted against his principal. Thus, when a bailiff had, on his warrant, acknowledged he had received the money, and directed a discharge in a suit against the sheriff; this was held to be good evidence, though it was claimed the bailiff should be called. Perchard & al. v. Tindall, 1 Esp. Ca. 394. So the declaration of a clerk in a banking-house as to alterations made in the plaintiff’s pass-book, was evidence against the principal. Price v. Marsh & al. 1 Car. P. 60. (11 E. C. L. 313.) So where the president of a bank called upon the defendant to pay a note, which the defendant claimed was paid, and upon examining the books, the president declared himself satisfied that this claim was correct; it was held, in an action upon the note, that the declaration of the president was proper evidence, being part of the res gestee. It was an admission made in the business of his agency, in respect to the very matters committed to his charge. Bank of Monroe v. Field & al. 2 Hill 445. The power of William Church, in this case, was surely as great in relation to the subject of this ore, as the president’s was as to that note: both were acting upon their proper business, and within the scope of their authority. In Newell v. Roberts, which has been cited by the defendants, the principle was recognized, that the acts or declarations of an agent, in the course of his agency, were admissible, constituting part of the res gestee; but it was held, that Newell was not the agent of the defendants, much less of the creditors who signed the receipts. 13 Conn. R. 72.

In the case of a surety in a probate bond, a judgment against the principal was held conclusive evidence against the surety, unless fraud could be shown in obtaining it, though it was urged, that it might have been obtained upon the confession of the principal. Willey v. Paulk, 6 Conn. R. 74. And in Drummond v. Prestman, 12 Wheat. 516. where such a judgment was given in evidence, and also an account stated by the principal, while alive, it was held, that that account might be given in evidence against the guarantor. The judge says, the guaranty purports to be something more than the mere suretyship for debt. The words are “ I guaranty to you the conduct of my son.” It partakes, therefore, of the nature of a bond for the faithful discharge of a duty ; and it cannot be doubted, that in proving the fact of the breach of the condition of such a bond, the confessions of the principal, after his death, would be evidence. In that case, the principal being dead, it was not necessary to go further, though it is intimated, that the case of Perchará v. Tindall would go far to show that the same rule would operate, had the principal been alive. That certainly would be of no importance, unless it was the duty of the plaintiff to call him as a witness to prove an actual sale, instead of proving his declarations of a sale accompanying his directions to go on with the work. Having shown that the latter was sufficient to authorize the plaintiff to proceed in the work, the former proof would become unnecessary ; and the testimony of William Church to his acts or declarations is no higher species of proof than that of any oilier witness to such acts or declarations: of course, the plaintiff could be under no obligation to call him. And in the case of Deming v. Carrington, 12 Conn. R. 1. it was decided, by this court, that where the defendants claimed title to land under Cowles, the plaintiff might prove the acts and declarations of Cowles, - while owner and in possession, though Cowles was alive and might have been called.

It was said, further, that if this testimony was admissible against these defendants, it might be rebutted; in other words, that the defendants might show, that there was no sale of the ore. No evidence of that kind was offered by the defendants, and ruled out by the court; but the jury were told, that if William Church represented to the plaintiff, that he had sold the ore, and directed him to get it out as soon as possible, and the plaintiff had done the same ; the plaintiff, having in pursuance of these orders done the work, would have a right to look to William Church for pay for his labour, whether Church had in fact sold or not; and that the defendants, having promised that William Church should perform his contract, must be responsible for his non-performance ; and this, perhaps, warrants the construction given by the defendants to that part of the charge. We think the charge, on this point, was correct. The defendants, having warranted performance on the part of William Church, must be considered privy with him, so that if he has not complied with his engagement, they must be equally responsible with him. And although there may be cases where a party who has asserted a claim, may show he was mistaken, or where another’s interest cannot be affected ; yet we understand the rule to be, that where the representations are such that another party may be presumed to have acted upon them, or upon the faith of them, and the party himself has gained some advantage, such representations are conclusive. See note (⅞) to Bacon v. Chesney, 1 Stark. Ca. 194. In conformity to this idea, Bailey,.J., in Shaw v. Picton, says, “If an agent, employed to receive money and communicate to his principal, renders an account from time to time, which contains a statement that the money has been received, he is bound by that account, unless he can show, that that statement was made unintentionally and by mistake.” “ When an agent has deliberately and intentionally communicated to a principal, that the money due to him has been received, he makes the communication at his peril, and is not at liberty afterwards to recover the money back again.” 4 B. & Cres. 715. (10 E. C. L. 443. 450.)

William Church made this communication to the plaintiff; and upon the strength of it, the plaintiff waived his privilege of terminating the contract, and went on with his labour. It would, therefore, be most flagrant injustice, to say, that the plaintiff should sustain the loss of his labour performed in good faith, in pursuance of his undertaking, and under the direction of William Church, the man with whom he contracted, whether that loss arose from the fraud or from the mistake of said Church. We know of no principle of law, any more than of justice, which requires such a construction. The court, therefore, are satisfied, that no new trial ought to be granted.

In this opinion the other Judges concurred, except Church, J., who gave no opinion, being related to one of the parties.

New trial not to be granted.