Commercial Bank v. Waters

McLennan, J. (dissenting):

I cannot assent to the conclusion reached in this case.

By the letter of December 18, 1897, in which was inclosed the notes in question, all of which were indorsed by Alfred Dolge & Son, the defendant assumed, in form at least, to guarantee the 'payment of such paper. The words used are as follows: And .by chance should any paper you take pass due date please advise me at once, and I will have draft in your hands in three days time for *448payment.” There is nothing in the letter to indicate that the defendant was agent for Alfred Dolge & Son, or that he, the.defendant, was acting in any other capacity than as an individual. This letter and the answer to it dated December 20,1897, constitute the entire agreement between the parties in respect to the transaction in question.

There is evidence tending to show that at the time the paper which is the subject of this litigation was delivered to the plaintiff, the plaintiff knew that the defendant was acting as. broker or agent for the firm of Alfred Dolge & Son, for the purpose of procuring its paper to be discounted, but such knowledge on the part of the plaintiff in no way affects or relieves the defendant from liability.

The ' authorities cited. (Mech. Agency, § 558; Story Agency, § 261, and the case of Whitney v. Wyman, 101 U. S. 396), and many others, hold, as stated, that when a man is known to be • acting and contracting merely as an agent of another who is also known as the principal, his acts and contracts will be deemed the acts and contracts of the principal only if such agent had authority to act; but such rule is not applicable to the facts in the case at bar. If so, the guaranty contained in the letter of December IS, 1897, is meaningless, and has no force or effect whatsoever. Alfred Dolge & Son were absolutely liable upon the paper in question, by reason of their indorsement, and no guaranty by the defendant could add to or increase their liability. It was perfect and complete by reason of the indorsement, and independent of anything contained in the letter; so that, if the words quoted from the letter were sufficient to constitute a guaranty, and it seems to be assumed that they were, they could not have been lised for the purpose -of constituting a guaranty on the part of -Alfred Dolge & Son, because, as before stated, they had already guaranteed by their indorsement. The words employed by the defendant clearly were used for the purpose of giving additional security to the purchaser of the paper. Defendant says, “Should any paper you take pass due date * * * I will have draft in your hands in three days time for payment.” That did not add to the obligation of Alfred Dolge & Son. They had undertaken, in as binding form as possible, to have the amounts of the notes held by the plaintiff at the place where they were made payable respectively, on the very day that such notes, became due, and if they failed in that regard an action could be commenced and *449maintained to enforce such obligation, but the obligation on the part -of the defendant was, “ If the makers and indorsers of the notes fail "to pay, I will pay ydthin three days after such failure.” Illustration -cannot make the principle more plain than do the facts disclosed by the evidence in this case, even giving them the most liberal interpretation in favor of the defendant.

When the notes in question were delivered to the plaintiff they were guaranteed by Alfred Dolge & Son. Can it be said that the -agreement contained in the letter of December 18, 1897, only con.stituted a reguaranty by Alfred Dolge & Son ? One guaranty by Alfred Dolge & Son was as good as two. We think such was not 4he meaning of the language, nor the intention of the defendant when he wrote the letter in question.

In the case of Hall v. Lauderdale (46 N. Y. 74) the court says : In case of written agreements executed by an agent, the agent is, in general, personally bound, if the instrument can have no legal operation against the principal.”

The agreement made by the agent, the defendant in this case, ■could by no possibility have any legal .operation against the prin■cipal. If the defendant’s contention is correct it was surplusage^ meaningless, and in no way affected, increased or decreased the liaTbility or obligation of Alfred Dolge & Son.

If the agreement on the part of the defendant had been, If the notes which I send to you are not paid when due I will procure •other paper of equal amount to be substituted in their place,” under the cases cited it would undoubtedly be held that the obligation to -.substitute additional paper was the obligation of the principal; that is entirely different from holding that an agent, when he uses words ■ clearly sufficient to constitute a personal guaranty of payment, will "be presumed to have guaranteed payment on behalf of his principal •when such principal has already made such guaranty.

I think the decision of the learned trial justice was correct; that the exceptions should be overruled and the motion for a new trial •denied, with costs. ,

Defendant’s exceptions sustained and motion for a new trial granted, with costs to the defendant to abide the event.