Ruggles v. Holden

By (the Court,

Sutherland, J.

This case appears to me not to fall within the principle established in the cases of Paine v. Packard, (13 Johns. R. 174,) and King v. Baldwin, *218(17 Johns. R. 384.) It was there held that if an obligee or holder of a note who is requested by the surety to proceed without delay and collect the money from the principal, who is then solvent, refuses or neglects to proceed against the principal, who afterwards becomes insolvent, the surety will be discharged. These cases proceed upon the principle that the creditor is under an equitable obligation to obtain payment from the principal debtor if he is able to pay, and not from the surety, and that such is the essence of the contract; and if the creditor, after an explicit request by the surety, refuses to proceed against the principal, and thereby the means of obtaining the debt from the principal are lost, the surety is exonerated. In both those cases the suits were brought upon promissory notes made by two defendants, the one, however, being only a surety; there was no special contract or covenant on the part of the sureties ; they merely signed the note with their principal ; there is an implied promise or undertaking under such circumstances, on the part of the creditor, that he will prosecute the principal whenever the surety shall request it, and such, as Judge Spencer expresses it, is the essense of the contract. The law adjudges that such was the understanding of the parties.

But where a party enters into a special covenant with a creditor upon a valid consideration, as surety for his debtor, such covenant is to be construed like all other contracts, and the intention of the parties is to be gathered by considering the instrument in all its provisions, and giving to the language employed, its ordinary and natural signification. It is very clear to my mind that it was the intention and understanding of the parties to this contract, that Ruggles should assume the responsibility of seeing that the rent was punctually paid as it became due, without its being necessary for the plaintiffs to take any measures to enforce payment from the tenant, or even to demand the rent from him. 1 should infer that the very object of the plaintiff in requiring this security was to avoid the necessity of resorting to the unpleasant process of a distress in order to collect the rent. Ruggles expressly covenants, if there shall be any default on the part of the tenant in paying his rent, that he will pay such *219sum or sums of money as will be sufficient to make up such deficiency, and fully satisfy the condition of the said agreemeut, (by the tenant,) without requiring any notice of nonpayment, or proof of the demand being made. Here is an unqualified covenant to pay if the tenant is in default for a day, and that without receiving any notice of the tenant’s default, or of any demand having been made upon him. The defendant assumed the responsibility of ascertaining for himself whether the tenant paid as his rent became due, and, by his covenant, subjected himself to an action the moment there was a default in payment.

It appears to me that it would be doing violence to the manifest intention of the parties, to hold, that under such circumstances, the defendant had a right to call upon the plaintiff to distrain his tenant’s goods, and that because he refused to do so, he had exonerated the defendant from his covenant.

Judgment affirmed.