This was an action of assumpsit upon the guaranty of a note, a copy of which, marked A, is sent as a part of this case.
For the plaintiff it was proved that the note was given by the guarantor in payment for the purchase of a share in a vessel.
At the time when the note became due, on 1 October, 1846, the maker had a store in the town of Bath and had $2,000 or $3,000 worth of property in possession, and was then supposed to be solvent; but on 6 January following he executed a deed in trust, and the effects therein conveyed did not pay his debts by $5,000 or $6,000. In February or March afterwards (171) he died totally insolvent, and no administration has been taken on his estate. It was proved that up to the time when he executed this deed of trust, he was punctual in paying demands upon him, borrowing money to meet such demands rather than be sued or warranted upon them; and that, as late as the latter part of December, 1846, he borrowed $400 from the bank by the aid of his father, who was a man of property. No evidence was offered of any demand having been made of Topping, the maker of the note, nor was it shown that any was made upon the defendant as guarantor, until a few days before the bringing of the action. This demand was made by Havens, to whose use this suit is brought, who has always resided in Washington, twenty miles from Bath.
The plaintiff's counsel contended that by the special terms of the guaranty the defendant was bound absolutely and in all events to pay the note; but that, if that were not so, he was bound unless it appeared that the money might have been collected from the maker by the use of reasonable diligence. The defendant's counsel contended that the plaintiff could not recover, for the want of a demand on the maker of the note, and also of a failure to use due diligence in endeavoring to collect the money from the maker; and that the question of diligence was a question of law, to be decided by the court.
The court held, and so instructed the jury, that the defendant was not bound absolutely and in all events, as if he was a surety to the note; nor was he discharged by the plaintiff's failing to show a demand upon the guarantor under the circumstances *Page 132 of this case; that the true inquiry was whether the defendant had sustained any damage by the plaintiff's failing to use due diligence in endeavoring to collect the note from the maker, that is, such diligence as a man of ordinary prudence would use in collecting his own claim; that if they (172) believed that the plaintiff could not have collected the money from the maker by the use of such diligence, then they ought to find a verdict for him; otherwise, for the defendant. The plaintiff had a verdict and judgment, and the defendant appealed.
(A)
$307.70. WASHINGTON, N.C. 1 April, 1846.
Six months after date I promise to pay W. H. Willard or bearer three hundred and seven dollars and seventy cents, for value received, as witness my hand and seal.
L. J. TOPPING. [SEAL.]
Upon the back of which note this indorsement appears:
I hereby guarantee the payment of the within note to Tilman Farrow.
ISAIAH RESPESS.
26 April, 1846. On the part of the defendant it is objected that the plaintiff cannot maintain the action for the want of a demand on the maker of the note, the subject of the guaranty, and also because of a failure on the part of the plaintiff to use due diligence in endeavoring to collect the money from the maker of the note, and because the question of diligence was one of law, to be decided by the court.
To these objections the charge of the presiding judge was a full answer. The jury were instructed that the defendant was not discharged, under the circumstances of this case, by the plaintiff's failing to show a demand; that the true inquiry was, Has the defendant sustained any damage by the failure of the plaintiff to use due diligence in endeavoring to collect the note from the maker? — that is, such diligence as a man of ordinary prudence would use in collecting his own claim. That (173) he might not be misunderstood, his Honor proceeds: If they believed the plaintiff could not have collected the money by the use of such diligence, then they ought to find a verdict for him; otherwise, for the defendant. To enable the *Page 133 jury to come to a satisfactory conclusion on the question, he informs them what in law is due diligence. Their attention was then drawn, very distinctly, to the true point in issue between the parties, to wit, the injury sustained by the defendant in consequence of any misconduct of the plaintiff in endeavoring to collect the money. There can be no doubt but that the indorsement of the note by the defendant is an express guaranty. It is so in its terms, and was not made simultaneously with the note, but nearly three months thereafter. "I hereby guarantee the payment of the within note to Tilman Farrow." There is no room for constructions: it is a positive undertaking, and the defendant assumed all the responsibilities of a guarantor, and no more. After ascertaining the true character of the contract on the part of the defendant, the only inquiry is as to the fact of damage to him resulting from the laches of the plaintiff. If the plaintiff has, by any misconduct of his, put it out of the power of the defendant to secure himself in part or in whole, to the same extent is his claim upon the guarantor diminished. If the loss has been a total one, his claim is gone; if a partial one, he is entitled to redress pro tanto; because the obligation of a grantor is, that if the money, by due diligence, cannot be collected out of the maker of the note, he will pay it. Ordinarily, it is the duty of the holder of a guaranty to demand the money of the maker of the note; but if the maker be insolvent, it is not necessary. In this a guaranty differs from an indorsement. In the latter case the indorsee is bound to strict punctuality in presenting the note for payment, and giving notice, by the earliest opportunity, to the indorser sought to be charged, of its dishonoree. Any neglect in either of these particulars (174) will discharge the indorser, without any proof on his part of any loss or injury, resulting from it. But negligence alone will not discharge a guarantor. He must go further, and show that by it he is injured. Shewell v. Knox, 12 N.C. 404; Ashford v. Robinson,30 N.C. 144; Story on Notes, sec. 400; Vanevar v. Woolly, 3 Bar. and Cross., 439, 447. The question was fairly and fully left to the jury, and they found that the defendant had suffered no loss by any negligence of the plaintiff, and, according to the authorities cited, the plaintiff was entitled to a verdict for the full amount of his claim.
We find no error in his Honor's charge, and the judgment must be affirmed.
PER CURIAM. Judgment affirmed.
Cited: Rowland v. Rorke, 49 N.C. 339; Kenyon v. Brock, 72 N.C. 557;Sullivan v. Field, 118 N.C. 360. *Page 134