Bray v. Marsh , 1883 Me. LEXIS 156 ( 1883 )

Dankorth, J.

From the report in this case it appears that the defendant assuming to be the owner of a negotiable promissory note payable to Frank E. Kidder, but not indorsed by the payee, sold and delivered it to the plaintiff with the indorsement upon the back : " Holden without demand or notice, ” which was signed by him as a part of the contract of sale, and upon this contract the action is brought. This sale and indorsement was after the original delivery of the note and before it became payable. The maker of the note was in good credit at its maturity and remained so for about three years thereafter when he became utterly insolvent.’ In the meantime the defendant made of the plaintiff one or more requests that he would collect the note of the maker, which he neglected to do, though he made a demand upon the maker for the payment as he says within sixty days after maturity, as the letter of the maker shows in less than thirty days.

The defence is put upon two grounds. First, that the case -does not show to whom the defendant undertook to guarantee the note ; and second, the negligence of the plaintiff in not collecting of the maker when he might have done so.

To sustain the first objection the case of Bichard v. Bartlett, 14 Mass. 279, is relied upon. It is true in this case as in that it does not appear how or for what purpose the defendant obtained the note. But in Bichard v. Bartlett, the court say the statement of facts does not show with whom the contract was made, and upon that omission the decision was founded and statement was discharged that the defect might be remedied if the evidence could be produced. In this- case the evidence ¡has been produced and shows beyond a doubt that the defendant was either the actual owner of the noté, or is estopped to deny ¡his ownership and that his contract was with the plaintiff and for a consideration moving- from him. Thus upon this point Bichard v. Bartlett, is an authority for sustaining the action.

• The second objection founded upon the alleged negligence of the plaintiff must depend upon the terms of the contract, which so far as is important to this point, is in writing and from the meaning of the par-ties as gathered from that writing we are to ascertain the force of the contract.

In this case it is claimed that the contract is that of guaranty, that a guarantor is not entitled to a demand and notice, and for that reason the written words are without meaning or effect. Were this .so, the plaintiff must recover, for the only complaint is that of delay. If the law imposes no duty upon the person receiving the guaranty to demand payment of the maker of the note or give notice of default, then a delay or omission even to do so, cannot- be a negligence of which the guarantor can complain. No case has been cited and as we believe none can be, in which it has been held that in order to make a guaranty of an existing debt absolute it is necessary to take any steps other than to make the demand and give seasonable notice. This is sufficient to enable the guarantor to protect himself, which is all that is required. It is no part of the plaintiff’s duty to commence an action upon the note, certainly not unless he is indemnified for his costs. Besides in this case he could not have sustained an action in his own name, nor does it appear that he had any right to use that of the payee.

It is undoubtedly true, that, as the defendant was not a party to the note and put his name upon it subsequent to its inception, he was not an indorser but rather a guarantor. Irish v. Cutter, 31 Maine, 536. Whatever may have been the early authorities, it must now be considered as well settled that a simple contract of guaranty without conditions or restrictions, requires a demand and notice. Story onProm. Notes,.§ 468 ; 3 Kent’s Com. 124 (12 ed.) ; Bickford v. Gibbs, 8 Cush. 156; Wildes v. Savage, 1 Story’s R. 22. By these and other authorities it appears that if the demand and notice are seasonable nothing further is necessary to lay the foundation of an action against the guarantor.

As a guaranty is a contract it is competent for the parties to impose such restraints and liabilities as they see fit. They may waive any conditions imposed by law, or may impose others. They may make them absolute or conditional.

Had the defendant been an indorser, the words used are so common, and have so frequently received a judicial construction, that no question could be raised as to their meaning or effect. The contract of guaranty, though not the same in respect to demand and notice, is similar to that of indorsement. The only difference is, that it is less restricted, inasmuch as-in the former it is seasonable if in time to protect the guarantor against the insolvency of his principal.. It would seem to be self-evident that a waiver in one case should have the same effect as in the other, and that the words used here are equally apt to effect that ■waiver, and render the liability absolute as in the case of an indorsement. It was so held hr Bickford v. Gibbs, supra. In Cobb v. Little, 2 Maine, 261, it was decided that language much less direct made the liability absolute, and an original undertaking. In Bean v. Arnold, 16 Maine, 251, the word "holden” attached to the name was held sufficient to render the guaranty unconditional. To the same effect are Blanchard v. Wood, 26 Maine, 358, and Irish v. Gutter supra.

Defendant defaulted.

Appleton, C. J.» Barrows, Virgin, Peters mid Sxmonds-, JJ., concurred.