Saint v. Wheeler & Wilson Manufacturing Co.

95 Ala. 362
CourtSupreme Court of Alabama
DecidedDecember 15, 1891
StatusPublished
Cited by44 cases

This text of 95 Ala. 362 (Saint v. Wheeler & Wilson Manufacturing Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Saint v. Wheeler & Wilson Manufacturing Co., 95 Ala. 362 (Ala. 1891).

Opinion

. McCLELLAN, J.

Tbe contract sued on is not a guaranty, but one of suretyship. Crossthwaite and tbe other defendants, who undertake that Saint shall faithfully perform bis contract with tbe company, are sureties of Saint, and not guarantors. Tbe distinction between tbe two classes of undertakings is often shadowy, and often not observed by judges and text-writers; but that there is a substantive distinction, involving not infrequently important consequences, is, of course, not to be doubted. It seems to lie in this: that when tbe sponsors for another assume a primary and direct liability, whether conditional or not in the sense of being immediate or postponed till some subsequent occurrence, to tbe creditor, they are sureties; but when this responsibility is secondary and collateral to that of tbe principal, they are guarantors. Or, as otherwise stated,-if they undertake to pay money, or do any other act, in tbe event their principal fails therein, they are sureties ; but, if they assume tbe performance only in the event tbe principal is unable to perform, they are guarantors. Or, yet another and more concise statement, a surety is one who undertakes to pay if tbe debtor do not; a guarantor, if tbe debtor can not; tbe first is sponsor, absolutely and directly, for tbe principal’s acts, the latter only for tbe principal’s ability [372]*372to do the act: “the one is the insurer of the debt,.the other an insurer of the solvency of the debtor.” This is the essential distinction. There is another going as well to its form. The contract of suretyship is the joint and several contract of the principal and surety. “The contract of the guarantor in his own separate undertaking, in which the principal does not join.” Indeed, it has been held, preter-mitting all other considerations, that no contract joined in by the debtor and another can be one of guaranty on the part of the latter (McMillan v. Bull’s Head Bank, 32 Ind. 11; s. c., 10 Law Reg., and notes, 435), though we apprehend that a case might be put involving only secondary liability on the sponsors, though the undertaking be signed also by the principal. However that may be, it is certain that in most cases the joint execution of a contract by the principal and another operates to exclude the idea of a guaranty, and that in all cases such fact is an index pointing to suretyship. See Brandt on Suretyship & Guaranty, §§ 1 and 2; 9 Amer. & Eng. Encyc. of Law, p. 68; Marberger v. Potts, 4 Harris, 9; Allan v. Hubert, 13 Wright, 259; Beigart v. White, 2 P. F. Smith, 438; Kramph’s Ex’r v. Hatz’s Ex’r, 2 P. E. Smith, 525; Birdsoll v. Hencook, 18 Law. Reg. 751, and notes; Hartman v. Nat. Bank, 103 Pa. St. 581; Courtis v. Dennis, 7 Metc. (Mass.) 510 ; Kearnes v. Montgomery, 4 W.Va. 29; Walker v. Forbes, 25 Ala. 139.

. Applying these principles to the bond sued on, the conclusion must be that it is not a guaranty but a suretyship on the part of Crossthwaite, Wright, Hall and Spraggins. It is not their separate undertaking, but the principal also executes it. While they employ the word “guarantee,” they directly obligate themselves along with Saint to pay, absolutely and wholly irrespective of Saint’s solvency or insolvency, all damages which may result to the obligee from his default. Not only so, but they expressly stipulate that the company need not exhaust its remedies against Saint before proceeding against them. It is, in other words, and in short, a primary undertaking on their part, not secondary and collateral, to pay to the company in the event of Saint’s failure, and not an undertaking to pay only.in the event of Saint’s default and inability to pay. They are sureties of Saint, and not his guarantors, and their rights depend upon the law applicable to the former relation, and not upon the law controlling the latter.

2. One of the important differences in the operation, effect and discharge of the two contracts finds illustration in this case. The undertaking of guaranty in a case like this is [373]*373primarily an. offer, and does not become a binding obligation until it is accepted, and notice of acceptance bas been given to tbe guarantor. Till tbis bas been done, it can not be said tbat there bas been tbat meeting of tbe minds of tbe parties wbicb is essential to all contracts. — Davis Sewing Machine Co. v. Richards, 115 U. S. 524; Walker v. Fortes, 25 Ala. 139. Being tbus a mere offer, it may be recalled, as of course, at any time before notice of acceptance. Indeed, there are authorities wbicb bold tbat, even after aeceptance and notice thereof, tbe guarantor may revoke it by notice tbat be will be no longer bound, unless be bas received a continuing or independent consideration wbicb be does not renounce, or unless tbe guarantee bas acted upon it in such way as tbat revocation would be inequitable and to bis detriment; and, in cases of continuing guaranty, tbe effect of such revocation is to confine tbe guarantor’s liability to past transactions. — 2 Parsons on Contracts, 30; Allen v. Kenning, 9 Bing. 618; Offord v. Davies, 12 C. B., N. S. 748; Tischler v. Hofheimer, 4 S. E. Rep. 370.

All tbis is otherwise with respect to tbe contract of surety. He is bound originally in all respects upon the same footing as tbe principal. His is not an offer depending for efficacy upon acceptance, but an absolute contract depending for efficacy upon complete execution, and its execution is completed by delivery. From tbat moment bis liability continues until discharged in accordance with stipulations of tbe instrument, or by some unauthorized act or omission of tbe obligee violative of bis rights under tbe instrument, or by a valid release. Nothing that be can do outside of tbe letter of tbe bond can free him from tbe duties and liabilities it imposes. He can not assert tbe right to revoke, unless tbe right is therein nominated. As was said by tbe English court, “if be desired to have tbe right to terminate bis suretyship on notice, be should have so specified in bis contract.”- — Calvert v. Gordon, 3 Man. & Ry. 124; Brandt Suretyship & Guar., §§ 113, 114.

3. Tbe evidence here as to tbe release of Crosstbwaite tends to show no more than tbis: tbat after tbe bond bad been delivered to plaintiff, and after its officers bad advised Saint tbat they were ready for him to enter on tbe discharge of bis duties under tbe contract secured by tbe bond, be (C.) requested plaintiff to take bis name off tbe paper. No assent to tbis request is shown, but only an inquiry on tbe part of plaintiff as to C.’s reasons for desiring to be released. It would seem tbat tbe court itself should have decided tbat these facts did not release Crosstbwaite; but tbe question [374]*374appears tó have been submitted to the jury. If this submission, or any of the instructions accompanying it, was erroneous, no injury resulted to defendants, since the jury determined the point against the alleged release, as the court should haye done, assuming it to have been a question of law* On the other hand, if it were a question for the jury, it is to be presumed they were properly instructed as to the rules of law which should guide 4hem to its solution, as no exceptions were reserved in that regard.

4. The exceptions which were reserved on this part of the case are to charges given, and to the refusal to give charges asked by defendants, declaratory of the effect which the discharge of Crossthwaite,

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95 Ala. 362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/saint-v-wheeler-wilson-manufacturing-co-ala-1891.