Janes v. Scott

The opinion of the court was delivered, October 29th 1868, by

Thompson, C. J.

We entirely agree with the learned judge below, that the guaranty of the defendant, the plaintiff in error, was not a guaranty of mere skill and fidelity on part of Burke, the contractor, distinct from, or independent of, performance, but that it was for the substantial completion of the contract according to its terms ex visceribus suis. This is imported in the terms used in the contract, viz., “ that the said Burke shall well and faithfully perform his part of the foregoing contract.” The contract distinctly provides for what was to be done. If anything be needed to sustain this interpretation of the words, it will be found in the clause in the contract inserted for the benefit of the contractor, — “ unavoidable accidents, to be allowed for in computing the time for the completion of the well.” If only skill and fidelity were guarantied, this would be an unmeaning provision, for nothing more than the exercise of these qualities by Burke would have been required, and he could abandon the work without completing it if he had fully exercised them. If the contract had been for skill and fidelity, the words used would only have extended to that, it is true; but it was for more — it was for the complete performance of a contract that Burke bound himself, and the guaranty was that he should well and faithfully complete it, and if unavoidable accidents should occur, time should be allowed in addition to the contract time for doing and completing the work. There was no error, therefore, in thus construing the guaranty.

2. The next question we shall notice is that raised in the defendant’s 2d point. The court below decided that correctly beyond doubt. The plaintiffs below were not bound to liquidate their damages by reason of the failure of Burke to perform his contract, by a suit against him, before proceeding on the guaranty of the defendant. They could do this by proceeding directly on the contract of guaranty, as was done, setting forth in their narr. the failure on part of Burke to perform according to contract, and showing due diligence on their part to obtain redress from him, or such facts as would negative the idea of negligence in this particular. One way of establishing due diligence undoubtedly is by suit against the principal without remunerative results, and it is often the most conclusive. But this is usually for a different purpose than the liquidation of the claim. I have examined very many precedents in our books on this point, and I find quite as many cases in which suit on the contract of guaranty Was the first step, as when suit was brought against the principal first. In Brown v. Brooks, 1 Casey 210, it is said, “ when the principal debtor is insolvent at the maturity of the debt, no such proceeding (as judgment and execution), is necessary as a foundation to an action on the guaranty. Nor is it necessary in such a case to show even a demand on the principal debtor and notice of non-payment given to the guarantor. This was decided in Gibbs v. Cannon, 9 S. & R. 292.” We need not cite further authorities to prove this doctrine. This error is not sustained.

3. We also think the learned judge was right in instructing the jury in the negative of the defendant’s 4th point, which was— that the plaintiffs were only entitled to receive nominal damages, if anything. Of course, if the principal failed of performance, the guaranty was to indemnify to the extent of the loss the plaintiffs had suffered. If any recovery could be had at all, there was nothing in the case, so far as we can discover, to reduce the same to nominal damages. The guarantor would not be excused from liability excepting from those inevitable occurrences which are designated in law as the act of God. The accidents pertaining to the business — mechanical results — were the object of the guaranty. Burke undertook to do the work in the face of such contingencies as did happen, and agreed that he would perform notwithstanding, and the defendant guarantied his doing it. The principal failed to perform, and abandoned the contract. The guaranty was therefore broken. The loss of the plaintiffs was, at the very least, what they had paid him, and this the court held the plaintiffs might recover. There was no error in this.

4. The last matter we shall notice, is embraced in the 8th assignment of error. In substance, that is a complaint against the charge on the question of insolvency. Burke, the principal, being called as a witness by the plaintiffs, as we understand it, testified that at the time he abandoned the work, he had a horse (value not stated) and $400 or $500 in money. How long he remained the owner of either was not stated. It was left as a question of fact to the jury on this evidence, to say whether or not the plaintiffs would have been able by process to have recovered against him their damages; that is, such damages as the jury should be of opinion the plaintiffs had sustained, if they had pursued him. The test would obviously be what might be recovered by process. They could not predicate a verdict of what they might suppose he would do voluntarily. This would be too uncertain. There is no legal presumption on the subject which would stand for proof. His character for honesty, and the fact that he had always paid his debts, would not be sufficient to establish solvency without evidence of property. The term itself implies ability to pay, not mere disposition to pay. It was, therefore, not improper for the court to refer the jury to the existence of the exemption law, and the fact that the money in the pockets of the principal could not be seized, to enable them to determine whether, by process against Burke, the plaintiffs could have indemnified themselves from him for their loss. If they could not, he was insolvent. The plaintiffs were not bound to do a vain thing, and pursue him if he had no property which was available. If he was solvent, the court told the jury the action could not be maintained against the guarantor — if he was not, it could. The jury found for the" plaintiffs, and must therefore have found him insolvent for all purposes of suit and process. We think this error is not sustained, and seeing nothing in any of the other specifications of error not specially noticed, we think this judgment ought to be aflirmed.

Accordingly, judgment affirmed.

Sharswood, J., dissented as to 8th assignment of error.