Gray, J.
After much hesitation and with some degree of reluctance, I have come to the conclusion that this appeal cannot succeed. The question is, what was the obligation assumed by the defendant towards the holder of the bonds of the Sea Cliff Association, when he executed the instrument of February 18, 1880
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That paper seems to introduce some doubt, and tends to confuse the mind, by the use of inapt words and by expressions which are certainly not calculated to make the meaning of the parties perfectly plain. It lias frequently been said that our
language is lacking in precision; but that fault will not alone account for the way in which the draughtsman has in this writing succeeded in darkening its meaning and in contributing an element of uncertainty to its purpose. If there ever was a case where resort to extrinsic circumstances connected with its making was permissible, this is one. But when we come to consider what they were, I doubt if we are much better off in our understanding. What gave rise to this agreement of the defendant rvas the circumstance that Mrs. Miller, the holder of the bonds, refused to assent to any arrangement with the Sea Cliff Company, under which the bonds should be surrendered to it. That company was endeavoring to effect an adjustment of its affairs, through which it might rid its property of the lien of the mortgage securing these and other bonds. The defendant was an officer and was interested in the success of its efforts for an adjustment, but of the details of the arrangement for it he knew little, if anything. They were confided to a committee, agreed upon by the trustees of the association and the bondholders. A bondholders’ meeting was called for the afternoon of February 18, 1880, at which a plan of settlement was to be presented in a sealed report. In order to induce Mrs. Miller to yield in her objections to the surrender of her bonds, the defendant made the agreement in question. At the time, she already held the defendant’s obligation of FTovember 21, 1876, guaranteeing to Win. Miller, her predecessor in interest, the payment of the bonds. This was a clear and simple agreement of the defendant, by which he became at once liable to pay the amount of the bonds, if the obligor named failed in its obligation to the holder. And here we must notice that these bonds were originally acquired by purchase from the company. This is admitted by the ¡headings ; and they were not taken originally by the predecessor in interest of the plaintiffs as collateral security for an indebtedness of the company to him, as it seems to be suggested by the plaintiffs. Their purchase was induced by the defendant, and the above guaranty was then executed; defendant being interested in the projects of the company as promoter and
otherwise. So the question was, when the subsequent holder of the bonds was asked to give them up, how should she be further protected, as an inducement to do that? What plan of adjustment, which tlfe bondholders would be requested to enter into, would be reported was not apparently definitely known by the parties, at any rate not by Mrs. Miller, and this ignorance might account for the indistinctness of the agreement made by the defendant with her in the morning before the bondholders’ meeting. Its recitals comprehend the purpose of a release of the lien upon the company’s land, and
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the surrender and cancellation of the bonds and the substi tution of other securities in the place thereof, to which' the said D. B. Miller has consented and agreed.” What the defendant then obligates himself to do is expressed as follows, viz.:
“ In the event that any or all of the matters and things hereinbefore mentioned or referred to shall happen, or in case said bonds or my said guarantee shall be cancelled or destroyed, or otherwise disposed of, as required by said association hereafter, and in spite of and notwithstanding anything that may happen or be done at the request of said association, or in behalf thereof, my aforesaid guarantee of said bonds, and my obligation created and incurred by reason of said guarantee, shall remain in full character and effect; - and this is hereby declared to be a continuing, running guarantee for the payment of said sum of three thousand dollars and interest (according to the original terms of said original guarantee) attached to and belonging to and guaranteeing any and all securities, acts and paper-writings and proceedings of said association in relation to the said D. B. Miller, and of its indebtedness to her, hereafter to be done, continued or made.”
When that instrument was executed, what resulted ? Mo change of position yet, but only the consent of Mrs. Miller to to do the certain thing recited; namely, to take other securities in the place of her bonds. She had not bound herself to anything more. But did the defendant bind himself to any further extent than, at most, to agree that the company should
pay the indebtedness, which had been previously guaranteed by him ? The only language, which might be deemed capable of the broadest meaning, is in the declaration that this guarantee attaches to and guarantees
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any and all securities, acts, papers; writings and proceedings of said association in relation to the said D. B. Miller and of its indebtedness to her, hereafter to be done, etc.” Row it must be conceded that everywhere in the paper the defendant binds himself to observe the first guaranty of payment of the bonds; and, in addition, to the payment of the indebtedness thus evidenced by them, in any other, or new, form and shape it might assume, in the stead of these particular bonds. We cannot say that, by this instrument, he put himself in the place of the debtor company and became the debtor ; leaving the company freed. Neither the paper-writing, nor the subsequent acts of the parties, permit of our entertaining any such proposition. I concede the motives of the defendant to have been based on personal inter est in the success of the adjustment scheme and that the legal adviser of the holder of the bonds tried by words and varied expressions to secure his client, by an agreement of the defendant. And he did so, in so far as it was an agreement that the company should pay its debt, however evidenced thereafter. Are we to assume from such language that the defendant ever said, or intended to do, more ? Or that he would assume the whole debt himself
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Clearly not, and the whole difficulty of the plaintiffs’ case is just this, that they construe the defendant’s agreement to be a raising of the debt from off of the company and its assumption by himself.
I think it perfectly clear that we cannot hold that agreement to import a greater obligation than that, whatever else might be offered to and accepted by the bondholder, in lieu of her bonds, and as representative of the indebtedness they evidenced, the defendant would guaranty the eventual payment of such indebtedness. It was an instrument of guaranty and nothing more. If so, then we cannot deny to the defendant the protection of the rule of law that his liability shall not be extended beyond the clear obligation of the agreement itself; though
we may be at liberty to inquire, in cases of doubt and ambiguity, as to the extent of ground covered by its terms.
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Gray, J.
After much hesitation and with some degree of reluctance, I have come to the conclusion that this appeal cannot succeed. The question is, what was the obligation assumed by the defendant towards the holder of the bonds of the Sea Cliff Association, when he executed the instrument of February 18, 1880
%
That paper seems to introduce some doubt, and tends to confuse the mind, by the use of inapt words and by expressions which are certainly not calculated to make the meaning of the parties perfectly plain. It lias frequently been said that our
language is lacking in precision; but that fault will not alone account for the way in which the draughtsman has in this writing succeeded in darkening its meaning and in contributing an element of uncertainty to its purpose. If there ever was a case where resort to extrinsic circumstances connected with its making was permissible, this is one. But when we come to consider what they were, I doubt if we are much better off in our understanding. What gave rise to this agreement of the defendant rvas the circumstance that Mrs. Miller, the holder of the bonds, refused to assent to any arrangement with the Sea Cliff Company, under which the bonds should be surrendered to it. That company was endeavoring to effect an adjustment of its affairs, through which it might rid its property of the lien of the mortgage securing these and other bonds. The defendant was an officer and was interested in the success of its efforts for an adjustment, but of the details of the arrangement for it he knew little, if anything. They were confided to a committee, agreed upon by the trustees of the association and the bondholders. A bondholders’ meeting was called for the afternoon of February 18, 1880, at which a plan of settlement was to be presented in a sealed report. In order to induce Mrs. Miller to yield in her objections to the surrender of her bonds, the defendant made the agreement in question. At the time, she already held the defendant’s obligation of FTovember 21, 1876, guaranteeing to Win. Miller, her predecessor in interest, the payment of the bonds. This was a clear and simple agreement of the defendant, by which he became at once liable to pay the amount of the bonds, if the obligor named failed in its obligation to the holder. And here we must notice that these bonds were originally acquired by purchase from the company. This is admitted by the ¡headings ; and they were not taken originally by the predecessor in interest of the plaintiffs as collateral security for an indebtedness of the company to him, as it seems to be suggested by the plaintiffs. Their purchase was induced by the defendant, and the above guaranty was then executed; defendant being interested in the projects of the company as promoter and
otherwise. So the question was, when the subsequent holder of the bonds was asked to give them up, how should she be further protected, as an inducement to do that? What plan of adjustment, which tlfe bondholders would be requested to enter into, would be reported was not apparently definitely known by the parties, at any rate not by Mrs. Miller, and this ignorance might account for the indistinctness of the agreement made by the defendant with her in the morning before the bondholders’ meeting. Its recitals comprehend the purpose of a release of the lien upon the company’s land, and
“
the surrender and cancellation of the bonds and the substi tution of other securities in the place thereof, to which' the said D. B. Miller has consented and agreed.” What the defendant then obligates himself to do is expressed as follows, viz.:
“ In the event that any or all of the matters and things hereinbefore mentioned or referred to shall happen, or in case said bonds or my said guarantee shall be cancelled or destroyed, or otherwise disposed of, as required by said association hereafter, and in spite of and notwithstanding anything that may happen or be done at the request of said association, or in behalf thereof, my aforesaid guarantee of said bonds, and my obligation created and incurred by reason of said guarantee, shall remain in full character and effect; - and this is hereby declared to be a continuing, running guarantee for the payment of said sum of three thousand dollars and interest (according to the original terms of said original guarantee) attached to and belonging to and guaranteeing any and all securities, acts and paper-writings and proceedings of said association in relation to the said D. B. Miller, and of its indebtedness to her, hereafter to be done, continued or made.”
When that instrument was executed, what resulted ? Mo change of position yet, but only the consent of Mrs. Miller to to do the certain thing recited; namely, to take other securities in the place of her bonds. She had not bound herself to anything more. But did the defendant bind himself to any further extent than, at most, to agree that the company should
pay the indebtedness, which had been previously guaranteed by him ? The only language, which might be deemed capable of the broadest meaning, is in the declaration that this guarantee attaches to and guarantees
“
any and all securities, acts, papers; writings and proceedings of said association in relation to the said D. B. Miller and of its indebtedness to her, hereafter to be done, etc.” Row it must be conceded that everywhere in the paper the defendant binds himself to observe the first guaranty of payment of the bonds; and, in addition, to the payment of the indebtedness thus evidenced by them, in any other, or new, form and shape it might assume, in the stead of these particular bonds. We cannot say that, by this instrument, he put himself in the place of the debtor company and became the debtor ; leaving the company freed. Neither the paper-writing, nor the subsequent acts of the parties, permit of our entertaining any such proposition. I concede the motives of the defendant to have been based on personal inter est in the success of the adjustment scheme and that the legal adviser of the holder of the bonds tried by words and varied expressions to secure his client, by an agreement of the defendant. And he did so, in so far as it was an agreement that the company should pay its debt, however evidenced thereafter. Are we to assume from such language that the defendant ever said, or intended to do, more ? Or that he would assume the whole debt himself
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Clearly not, and the whole difficulty of the plaintiffs’ case is just this, that they construe the defendant’s agreement to be a raising of the debt from off of the company and its assumption by himself.
I think it perfectly clear that we cannot hold that agreement to import a greater obligation than that, whatever else might be offered to and accepted by the bondholder, in lieu of her bonds, and as representative of the indebtedness they evidenced, the defendant would guaranty the eventual payment of such indebtedness. It was an instrument of guaranty and nothing more. If so, then we cannot deny to the defendant the protection of the rule of law that his liability shall not be extended beyond the clear obligation of the agreement itself; though
we may be at liberty to inquire, in cases of doubt and ambiguity, as to the extent of ground covered by its terms. It is not his debt, the payment of which is being secured, but the debt of another, and strict construction of the promise is but a matter of legal right and of justice, which we cannot disregard. The holder of the bonds was quite at liberty to refuse to change her position of security and to give up her bonds, without that the company gave to her a security of some kind evidencing, or assuring its debt to her. She had not consented to forgive or release the debt, only to a change in the form of it. When,, therefore, her legal adviser, as her agent, attended the bondholders’ meeting, in the afternoon of the day when this guaranty was made, she was not bound to compromise her position towards the_ defendant by any such act as her attorney performed for her, in the signing of the bondholders’ agreement. Client and attorney were chargeable with the legal import of the defendant’s agreement, and, as well, with the legal effect of any contract with the company respecting her claims against it The contract, which was executed between the company and the bondholders, involved the payment in full of its bonds, by the purchase therewith of a certain number of lots of land. Its only possible object was to discharge so much indebtedness as they represented, by the conveyance of lands at a price fixed as equivalent to the par of the bonds. Such a. contract it was open to the bondholders to reject, or to make. Mrs. Miller could have declined to execute it, or to release to the company the indebtedness represented by the bonds, and she would have been as safe as ever she had been previously. But she bound herself to its terms, and when she got the lots, her claims against the company were extinguished. I cannot understand the proposition that, in such a transaction, where mortgaged premises are conveyed, in whole, or in part, for the release of the mortgage and the cancellation of the bonds, the land in any sense represents the original indebtedness, so as, if it subsequently sells at a less ratio of value than the par of the mortgage bonds, an agreement guaranteeing the full payment of the bonded indebtedness can be resorted to. I do not think
that resort to extrinsic facts and circumstances can be allowed for the purpose of extending a promise of guaranty to an assurance of the sufficiency in value of what is taken in payment by the creditor. Very precise and unmistakable words would be needed to that end.
I see nothing more in the plaintiffs’ claim. Their argument is that the defendant’s agreement covered any deficiency towards the original claim, after the sale of the lots, which were taken, under the bondholders’ agreement, for the bonds. The answer is that its language imports no such obligation, in terms express, or implied. By words and by expressions, the idea is made ■dominant that the company’s existing indebtedness should be paid, no matter what the form it offered to evidence it in; but it did not bind the defendant in case that indebtedness wras settled for. It did not bind him, if the company paid off its debt, so as to remain released to its creditors and to the world, to stand ready, if what was taken in payment failed, at some time in the near or remote future, to realize an amount equal to the original debt, to assume the deficiency.
I think the decision of the General Term was right and that its order should be affirmed, and, under the appellant’s stipulation, judgment absolute should be rendered against them, with costs.
All concur, except Earl and Peckham, JJ., dissenting.
Order affirmed and judgment accordingly.