Ordeman v. Lawson

49 Md. 135, 1878 Md. LEXIS 31

• Court: Court of Appeals of Maryland
• Decided: June 26, 1878
• Status: Published

Opinion

Miller, J.,

delivered the opinion of the Court.

The appellant brought this action of assumpsit against the appellees, partners, trading as J. H. Lawson & Bro., mainly upon the following written guaranty: “'April 19th, 1875. We guarantee the payment of a note endorsed by George W. Davis, Wm. M. Davis, I. T. Davis, the amount being five hundred dollars ; date of note, April 19th, 1875,” (signe’d) “ J. H. Lawson & Bro.” At the trial, the defendants interposed the objection that the instrument was within the fourth sectipn of the Statute of Frauds, and void for want of a sufficient consideration appearing on its face. To meet this objection, the plaintiff offered in evidence the following promissory note: “April 19th, 1875. Twelve months after date, we, or either of us, promise to pay H. D. Ordeman, or order, the sum of five hundred dollars, for value received, with interest from date,” (signed) “ George W. Davis, Wm. M. Davis, Isaac T. Davis,” and then proposed to prove by George W. Davis, the following facts, viz., that in 1874, he had collected $250 for the plaintiff, and requested the latter to loan him $500, which the plaintiff agreed to do, provided he gave good security; that witness thereupon, on the 19th of April, 1874, wrote a note for that sum, payable to the order of Ordeman, at twelve months, with interest from date, signed it, obtained the signatures of his brothers, William and Isaac thereto, and took it to the plaintiff, who was not satisfied therewith, and refused to let him have the money without other security ; that he then went to the Lawsous who refused to go security upon the note, hut said they would guarantee the same, and thereupon gave him the following paper: “April 19th, 1874, Capt. Tí. D. Ordeman, let George W. Davis, Wm. M. Davis and I. T. Davis, have five hundred dollars, by them giving their note, dated April 19th, 1874. We will pay it, provided you can’t collect it off of them.” (Signed) “J. H. Laioson & Bro.” and witness then took the note and this paper wrapped or folded together, and gave them to the plaintiff, who thereupon gave him $250 in cash, which with the money he had collected and had in his possession, made $500, the consideration of the note ; when this note matured, he was unable to pay it, and plaintiff agreed to renew it on payment of interest, and witness then wrote the note dated the 19th of April, 1875, obtained his brothers’ signatures to it, and the'n went to the Lawsons, and asked them to go security on it, which they refused to do, hut said they would guarantee it; that he then showed them the note, and one of them took the names, dates and amount from the note itself, and wrote the guaranty of the 19th of April, 1875, signed it, and gave it to witness, who then took' the note and guaranty, folded them together, and went to the plaintiff, and gave them to him ; that plaintiff then delivered to witness the note and paper of the 19th of April, 1874, (which he has since retained in his possession,) and he cancelled ihem by making pen-marks across the names of the makers; and that this note has not been paid. The plaintiff also further offered to prove by this witness, that there was no other note dated the 19th of April, 1875, made by these parties for $500, payable to the plaintiff, and proposed to follow this with testimony, showing that it was the intention of the defendants by the instrument of that date, to guarantee this identical note and none other. But the Court rejected all this parol testimony, in so far as it related to or affected the note and guaranty of the 19th of April, 1875, refused to allow that guaranty to be offered in evidence, and sustained the defendants’ objection to the same under the Statute of Frauds. This was the effect of the Court’s action in sustaining the demurrer to the first count of the declaration, in ruling out the testimony in the first and second exceptions, and in rejecting the plaintiff’s prayer, and granting the defendants’ first prayer.

These rulings present the only question of any importance in the case, and for deciding it, our own decisions afford ample guidance. In fact that part of the fourth section of the Statute of Frauds, which relates to agreements to answer for the debt or default of another has been so often considered, and its construction and effect so well settled in this State by the adjudications of the Court of Appeals, that resort to the decisions of other tribunals on this vexed subject is wholly unnecessary. We refer to the cases of Wyman vs. Gray, 7 H. & J., 409; Elliott vs. Geise, Ibid, 457; Aldridge vs. Turner, 1 G. & J., 427; Moale vs. Buchanan, 11 G. & J., 314; Nabb vs. Koontz, 17 Md., 283; Hutton vs. Padgett, 26 Md., 228; Frank vs. Miller, 38 Md., 450, and Deutsch vs. Bond, 46 Md., 164. By these cases it is established, that in order to bind a party upon a collateral promise to answer for the debt or default of another, it is necessary that the consideration as well as the promise should appear from the writing. In this respect the leading English case of Wain vs. Warlters, has been adopted and followed in Maryland. It is not necessary however, that the consideration should be stated in express terms, but it is sufficient if it may be collected or implied with certainty from the instrument itself. It frequently occurs that a guaranty is written upon the instrument which it professes to guarantee, as where a third party writes upon a promissory note at the same time that the note itself is executed and delivered to the payee, a guaranty in these terms, ££ I hereby guarantee the within or above note,” or ££I hereby guarantee payment of the within or above note,” and signs it, thus making but one contract, and in such cases the consideration which upholds the note, will support the guaranty and the latter will be good. It is obvious that in cases of this description, the reference in the guaranty to the note is so plain, that there can be no mistake or doubt as to what note the guaranty was intended for. It may occur, however, that no date is affixed to the guaranty so as to leave it uncertain whether it may not have been written after the note was executed, delivered and received as a complete contract by itself. In that state of case parol proof may he admitted to show identity of time, that is to say, that the guaranty was written and signed at the time of the execution and delivery of the note. Again, a guaranty containing no express consideration, may he a distinct instrument written upon a separate piece of paper, and in that case, its reference to the note intended to he guaranteed, must be so clear as to identify it with certainty, before the consideration of the one can he taken to support the other. In such case though parol proof may perhaps he admitted to establish identity of time where the instrument of guaranty is without date, yet it can never be resorted to for the purpose of identifying the note, by supplying defects in, or removing doubts arising upon the reference contained in the guaranty itself, for that would open the door to the very mischiefs the Statute was enacted to prevent. In other words, the Court upon reading the instrument must he able to say, that there is no ground for any'doubt respecting its reference to the note alleged to he guaranteed, and if this cannot he done the case against the guarantor fails.

Let us then apply these well settled rules to the case before us. The guaranty sued on is a distinct instrument, written upon a separate piece of paper, and not endorsed, nor written upon the note to which it is said to refer. Now reading the paper as we must, without reference to the parol testimony offered by the plaintiff, we find that it hears date the 19th of April, 1875, and refers to a note of the same date, and for the same amount as the note produced, hut here the correspondence between the two papers practically ends. It does not say it was a note at twelve months payable to the plaintiff or order, nor is it even addressed to the plaintiff as was the previous paper of the 19th of April, 1874. But more than this, the note it describes is a note “ endorsed ” by the Davises, whereas the note produced is a note of which they are the makers. The defendants were merchants, and we cannot assume they were ignorant of the meaning of the terms endorser and maker when applied to commercial instruments. But in fact the meaning of these terms when used in reference to promissory notes, is so well understood and so generally accepted that it cannot be said that any person of ordinary intelligence in describing in writing a note as endorsed by certain parties, means a note of which they are makers. We have therefore no hesitation in saying, that the description in a written guaranty of a note endorsed by certain named individuals, is not gratified by a note which the same parties have signed as makers. ISTor can the intention to refer to such a note be established in a Court of law in an action upon the guaranty, by parol proof of facts and circumstances from which a jury might find such intention. If it was the actual intention of the defendants to guarantee this note, then that intention has not been expressed in the guaranty, and resort must be had to a Court of equity to correct the mistake, and reform the instrument. In that tribunal, the parol testimony here offered may be available to prove the mistake, but we are now dealing with an action at law, and must read and construe the paper as it stands. Upon the question, we have thus considered, we cannot distinguish this case from that of Deutsch vs. Bond, 46 Md., 164.

It was said, though the argument was not pressed with much confidence by the appellant’s counsel, that this was an original and not a collateral undertaking, and therefore not within the Statute. In answer to this objection it is only necessary to refer to the case of Leonard vs. Vredenburgh, 8 Johns., 29, which -was cited and approved in Nabb vs. Koontz, 17 Md., 288. There was no error in granting the defendant’s second and third prayers. These were addressed to the note and guaranty of the 19th of April, 1874, to which the fifth count of the declaration refers. By the express terms of that paper the defendants engaged to pay that note in case the plaintiff could not collect it from its makers. The Court was clearly right in instructing the jury, there could he no recovery under this count of the declaration, unless they found that the plaintiff could not have collected the note of the 19th of April, 1874, from either of the makers of that note, and that there was no legally sufficient evidence in the cause from which they could find he could not have collected it from some one of such makers. We therefore find no error in any of the rulings of the Court below, to which exceptions were taken by the appellant, and the judgment must he affirmed.

(Decided 26th June, 1878.)

Judgment affirmed.