Russell v. Buck

11 Vt. 166

• Court: Supreme Court of Vermont
• Decided: January 15, 1839
• Status: Published

Opinions

Collamer, J.

The defendant, with his partner, was an indorser of a note of which the plaintiff was indorsee, and; as the declaration alleges, was liable for the debt; and at some period, either before or after the note became due, the defendant executed to the plaintiff the paper now in question. And the inquiry is, what is the legal effect of that paper ?

It is to be borne in mind that this is not an action against the defendant as indorser. Had it been so, there probably would have been little difficulty with the case. This writing would have been evidence in confirmation of the defendant’s liability. If given before the note was due, and viewed as an absolute promise, it would have waived all evidence of notice of non-payment. If given after the note was due, and considered as- an absolute promise to pay, on time, it would have waived all objection on account of the want of notice. Such has been repeatedly decided to be the legal effect of such a promise. The whole scope of the authorities, cited by the plaintiff, merely shows what is the effect of such a promise made by an indorser, when he is sued as indorser. This tends strongly to show that such a promise has no legal effect but as ancillary, and in confirmation of his existing liability, and does not extinguish that liability and create any new and substantive ground of action. The plaintiff has permitted the statute of limitations to run on any claim he has on the defendant, as indorser, and now claims to recover of the defendant on this writing as a substantive, independent, legal and perfect ground of action. Can this be sustained ?

To sustain an action on this writing, as. a contract, it must have a legal consideration. If the consideration is, that the defendant was then liable, as indorser, and in consideration thereof, promised to pay, if waited on, then it is like any case where a man owes a note now due, or to become due in six months, and, in consideration thereof, promises to pay the same, if waited upon one year. This new promise creates no new legal liability. It leaves the note, the debt and the parties as they were before. Such a promise might, indeed, if seasonably made, affect the claim as to the statute of limitation, but would be no ground of action in itself. If the defendant was not liable as indorser, then he is to be treated like any other third person. Here it is to be observed, that the writing does not.stipulate or imply, nor is it pretended that it was ever understood by the parties, that the plaintiff was to delay the collection of his debt from the maker of the note. In this category, treating the defendant as a third person, not liable until this promise, it is simply a promise to pay if he is himself waited on. Most clearly, a promise to pay the debt of another in a certain time, if so long waited on, leaving the debt to be enforced during all that time against the debtor, is nudum pactum. It is, therefore, extremely difficult, if not impossible, to view this writing as having any consideration as a substantive contract. It seems nothing more than a writing recognizing the plaintiffs liability, as indorser, and promising, as such indorser, to pay, if waited on, if the plaintiff did not collect of the makers. It therefore created no new liability but left the defendant still to be pursued, as indorser, and in that way only.

But even if we were satisfied as to the matter of consideration, we'do not consider this an absolute promise of payment. It is generally true, that where one undertakes for something to be done by himself or another, it is considered as absolute and unconditional. He must see it is done. But when he undertakes to do. provided the promisee shall do something, then his undertaking is always conditional, implying that the promisee shall use diligence and give notice of the result before action. In construing a contract, regard must be had to the subject matter, and the circumstances under which it was made, and all parts of the contract should have effect, This writing was made by an indorser to an indorsee, in relation to a note left in the hands of the indorsee in full effect. If the plaintiff could collect of the makers, that would be satisfactory to all, and was one thing he desired to effect. If he should not be able to collect of the maker, then he wanted pay of the indorsers. Now, under these circumstances, and for these purposes, was this writing made. After stating how the parties stood connected with the transaction, the promise is in these words : “ Now, therefore, I hereby guaranty to said Russell the collection and payment of the above described note”--- “ and agree to pay the same, on condition that said Russell does not call on me for payment till the 1 st day of May, 1831.” All that part which guaranties the collection of the debt is clearly a separate clause, and relates to procuring pay of the makers. That clause which promises to pay it himself, amounts to this, that in case it is not collected of the makers, he would pay it himself, on demand, after May, 1831. To hold this an absolute promise of payment by the defendant, on being waited on, makes the former clause of the promise nugatory and unmeaning. That former partis, in effect, a promise that the plaintiff, with proper and reasonable diligence, will be able to collect of the makers. It amounts to a guaranty that the note is collectable with reasonable diligence. Foster v. Barney, 3 Vt. R. 60. Sage v. Wilcox, 6 Conn, R. 81, And for this purpose the note was left in force, and in the plaintiff’s hands. The remainder of the promise is, if the plaintiff fails to collect of the makers, after reasonable diligence, then the defendant will pay, after May 1,1831. Such we consider the clear intent for which this writing was given and received, such is its meaning, and such, even if if has good consideration, is its legal effect, but it is not so declared on.

Judgment reversed.