Delafield v. Holbrook

Robertson, Justice.

In the recent case decided at a general term of this court, (Howard agt. Holbrook, 23 How. Pr. R., 64,) I had occasion to consider a precisely similar agreement as that now before the court, and to say that the plaintiff had his option between the contract of guaranty and that of sale ; assuming that there could be no controversy that there were two such contracts in the instrument in question. A still further examination and consideration have not shaken my views there expressed.1

A contract to guaranty the value of an article, and one to purchase it, arise from the use of different words and lead to different results and obligations; the first requiring a consideration to support it, and the second by the mutual agreement to buy and sell. No one could have the slightest doubt that if this instrument had ended with the date of March Y, 1856, it contains as complete a contract of guaranty as could have been drawn. The words “ for value received,” expressed the consideration, and implied something more than the future payment of the expected value; “ guaranty that the value shall be” is peculiarly expressive of such an undertaking, and does not approach in any way the language of an undertaking to purchase. The question remains whether the addition of the words “ at which price and at which date I will purchase the same if offered to me,” change the whole contract to one merely of purchase upon condition of a tender.

There is no inconsistency between the two clauses of this instrument, no indication that the second was meant to qualify the first, and no necessity of reconciling any conflicting meanings. There is no impossibility.arising from grammatical rules of their containing two distinct obligations. Instead of the relative pronoun “ which,” the parties might have employed a conjunction and the demonstrative pronoun “ that,” so as to have read, “ and I will purchase the same if offered to me at that time and at that price.” Relative pronouns have precisely that effect; the sentence does not remain the less double because of their use. It contains two undertakings, “ I hereby guaranty the value,” and “ will purchase,” whether there be one sentence or two. A deed by which A conveyed to B certain premises, the title to which A warranted, would not the less operate as a conveyance because it contained the warranty, which referred to the premises by a relative pronoun. There is no more authority for making the agreement to purchase predominate over and absorb the contract of guaranty, than for making the latter, which comes first, control the former. The “ value received” was stated to be for the guaranty, and not for the agreement to purchase. If the order had been inverted, placing the contract for purchase first, so as to have read, “ I will buy such a bond at such a price, on such a day, if offered to me, whose value I guaranty shall be such a price,” would the last part be rejected as surplusage ? Did any one ever before draw a simple agreement to buy in the form in which this instrument is drawn, placing the main idea last, and thrusting in a guaranty before it ? I cannot doubt that the legal effect of every word- of the instrument expressed the intention of the parties, and was necessary to do so.

Interpreted as a double agreement, the object is very plain. It is not to be assumed that the defendants’ testator believed or expected the bond mentioned -would be entirely worthless. He wished the plaintiff to retain it in his possession for two years ; he therefore guarantied that the value should be a certain sum at the end of that time. This would, however, give the plaintiff the right to recover only the difference between the actual and claimed value, retaining the bond : but he intended to give the plaintiff the option to recover the whole of the sum named on giving up the bond, if he preferred it.

A mere agreement to sell and buy would deprive the plaintiff of the right of retaining the bond, being indemnified against loss. Besides, such an agreement would require the plaintiff to tender on the day, which he might not be able to do, (see Howard agt. Holbrook, ubi sup.,) whereby the defendants’ testator would escape all liability; whereas the liability on a contract of guaranty would be fixed on the day named," and could not be increased or diminished afterward.

I do not consider it very hard that the bond, on beinir paid its inferiority of value to the sum named, should be retained by the plaintiff. What the value received was that induced the defendants’ testator to agree thereto does not appear; he may have sold the bond to the plaintiff at the price at which he agreed to take it back, and in such case he ran the risk of its falling in value, instead of the plaintiff. It is sufficient that the defendants’ testator agreed that the plaintiff might so retain such bond, receiving the difference of its value.

I am opinion, therefore, that the plaintiff should retain his verdict for the amount which has been given in his favor, and have judgment for the amount, with costs.

White, J., concurred.