Cowles v. Peck

• Decision Date: 09 September 1887
• Citation: 10 A. 569,55 Conn. 251
• Parties: COWLES, Ex'r, v. PECK.
• Court: Connecticut Supreme Court

10 A. 569

55 Conn. 251

COWLES, Ex'r,

v. PECK.

Supreme Court of Errors of Connecticut.

September 9, 1887.

Appeal from superior court, New Haven county.

E. F. Cole, for appellant. W. H. Williams, for appellee.

LOOMIS, J. This is a complaint to recover upon a guaranty in writing, signed by the defendant, on the back of a note given August 3, 1878, by on Robert Peck, and payable to the order of David M. Cowles, since deceased, the plaintiff's testator since deceased. A demurrer to the complaint, which was sustained in the court below, raises two questions for our consideration: First. "Was the guaranty an absolute or a conditional one? It was in these words: "I guaranty the within note good till paid."

The complaint is framed upon the assumption that it is an absolute guaranty of payment that required no action on the part of the payee or the plaintiff, while the demurrer on the other hand assumes that the guaranty is conditional and means that the note is capable of being collected by the use of ordinary diligence. We think the defendant's construction must be accepted as the true one. All the authorities agree that there is a broad distinction between guaranties of payment and guaranties of collection. The former are an absolute, unconditional undertaking, on the part of the guarantor, that the maker will pay the note, while the latter are an undertaking to pay if payment cannot by reasonable diligence be obtained from the principal debtor. There is some disagreement as to the precise steps to be taken by the holder of a conditional guaranty, in order to subject the guarantor, but this distinction is of no importance in the case, inasmuch as the complaint, in effect, concedes that no steps whatever were taken to collect the note of the maker, and there is no averment that it was not a collectible note. There has been no case before this court where the words of the guaranty were precisely like this. That of Allen v. Rundle, 50 Conn. 20, comes nearest to it. But there the words were "good and collectible," and they were construed as constituting a conditional guaranty. We do not think the addition of the word "collectible" controlled that case, for the words "good" and "collectible" are of similar import when used in such connection.

The plaintiff in support of his position cited Bank v. Hopson, 53 Conn. 454, 5 Atl. Rep. 601, where the guaranty was in this form: "For value received, we guaranty the within note until paid," which was held to be a guaranty of payment. In view of this case the plaintiff's counsel, with a suggestive play upon the words, asked: "How can the insertion of the word 'good' in a guaranty make it bad?" It cannot make it bad, but it may determine the class to which the guaranty belongs. Had the plaintiff used ordinary diligence in collecting the note of the maker, or shown that it was not collectible, he could have recovered, provided, of course, there was a good consideration. The simple question is, what does the word "good" in such a connection import? It seems to us unnatural to give it all the force that attaches to the word "payment," for the latter refers to the act of the debtor alone, irrespective of any steps taken by the creditor, while the former word refers to and qualifies the note. The maker of a note may pay it when no one would have considered the note good, and, on the other band, a note may be considered perfectly good which the maker would not pay till compelled to do so. The accepted test of the goodness of a note is its capability of being collected independent...