McDougal v. Calef

34 N.H. 534

• Court: Supreme Court of New Hampshire
• Decided: January 15, 1857
• Status: Published

Opinion

Eastman, J.

The contract upon which this suit was brought was to pay the plaintiff for such goods as he should let Stevens have, provided he should sell them and abscond, or should squander them. The goods were put into the hands of Stevens to be sold about the country, upon the agreement between him and the plaintiff that he should return the same, or account for them to th§ plaintiff ; and they were charged to Stevens upon the plaintiff’s books.

The contract of the defendants was not to pay for the goods in the first instance; nor does it go to the extent of a guaranty to pay for the same in default of payment' by Stevens, but the agreement by them was to pay for the goods in case Stevens should abscond with the money received for the sales, or in case he should squander the goods. It was in effect a guaranty for the honesty of Stevens and for ordinary good management in the sale of the goods, and for nothing more. Can then the defendants be holden upon the facts stated ?

A guarantor, in all ordinary contracts of liability by him, warrants the solvency of his principal and the payment of the debt in case of his default; and where his undertaking to pay is absolute, notice to him of the failure of his principal to pay is unnecessary. His liability is fixed without demand or notice. Butler v. Wright, 20 Johns. 367; 3 Kent’s Com. 124; Breed v. Hillhouse, 7 Conn. 523; Cooper v. Paige, 11 Shep. 73.

But where the undertaking is only collateral, notice must be given to the guarantor within a reasonable time; or it must appear that the situation and circumstances of the parties are such that no injury has resulted to the guarantor from the want of notice. The object of notice .is to inform the guarantor that he is relied upon for payment, and it should be given whenever it would be of any advantage for him to have it, that he may secure himself against loss. Oxford Bank v. Haynes, 8 Pick. 423; Norton v. Eastman, 4 Greenl. 521; Babcock v. Bryant, 12 Pick. 133; Howe v. Nichols, 9 Shepl. 175; Cannon v. Gibbs, 9 Serg. & Rawle 202.

Where notice- is required, it should be given within a reasonable time. It is not necessary to be given with the promptness and precision required to charge an indorser of a promissory note, but the holder should not delay so long as to cause injury to the. guarantor. Chitty on Bills 264; Nicholson v. Gouthit, 2 Black. 612; 3 Starkie Ev. 258, 650; Bank v. Haynes, 8 Pick. 423; 2 Taunton 206.

This contract or guaranty by the defendants was a conditional one; Beebe v. Dudley, 6 Foster 249 ; and the defendants were entitled to notice. It was given in June, 1852, and the last parcel of goods was delivered to Stevens by the plaintiff in September following, and the last money paid by Stevens to the plaintiff was in January, 1853. No notice was given to the defendants that the plaintiff would look to them, till April, 1853. Had notice been given in January, the debt could have been secured on Stevens’ property, but it probably could not have been in April; and the authorities would seem to show that the defendants in such a case would be discharged for the want of seasonable notice.

But it is not necessary to place our decision upon that ground ; neither is it necessary, in the view which the court have taken of the case, to consider whether this was a continuing guaranty; nor whether the plaintiff was bound to notify the defendants that he accepted it; nor is it necessary to determine the questions raised upon the declaration. The undertaking by the defendants was to pay for the goods in case Stevens should sell them and abscond with the money, or should squander the goods. There is no general or absolute liability embraced in the terms of the contract, and the defendants were to be answerable only upon the two provisos stated.

As to the first of these conditions, the report of the auditor finds that Stevens has not absconded; and as to the second, the only evidence of importance, as it strikes us, that the goods have been squandered, consists in the fact that Stevens has failed to pay a balance of $140.28, due the plaintiff on general account between them.

To squander is “ to scatter lavishly ; to spend profusely; to throw away prodigally; to waste.” And a squanderer is a spendthrift, a prodigal, a waster. Such is the definition given to the term by lexicographers, and such its general acceptation. Probably the defendants in using the word applied to it full as strong a meaning as that which we have stated. But however that may have been — and in construing the paper we are not to look to any such source for information — we are of opinion that there is nothing in the facts reported from which a legitimate inference can be drawn that Stevens squandered these goods. There is nothing differing from the ordinary case of a failure to pay a debt. No evidence of fraud, dishonesty or prodigality; neither of which can be inferred from mere non-payment.

The plaintiff founds his action upon this' contract, and a recovery can only be had upon a special declaration. To sustain such a declaration he must show, either that Stevens absconded with the money, or that he squandered the goods; and as the auditor finds neither of these facts in favor of the plaintiff, and the circumstances reported do not in our opinion establish either, there must, according to the agreement of the parties, be

Judgment for the defendants.