Hall v. Weaver

• Decision Date: 29 February 1888
• Citation: 34 F. 104
• Parties: HALL et al. v. WEAVER.
• Court: U.S. District Court — District of Oregon

34 F. 104

HALL et al. v. WEAVER.

United States Circuit Court, D. Oregon.

February 29, 1888

(Syllabus by the Court.)

A person who executes a bond with another as his surety conditioned for the payment of moneys advanced to the principal by the obligee therein, is a surety, and not a mere guarantor, and is not entitled to notice of the acceptance of the bond by the obligee.

When a person executes a bond as surety, and leaves it with his principal for delivery to the obligee, and before doing so the former procures a person to attest the signature of the surety, who is not authorized to do so, such attestation is not an alteration of the instrument that impairs or affects its value as an instrument of evidence in the hands of the obligee, because it was made before delivery.¹

L. B Cox, for plaintiffs.

Edward B. Watson, for defendant.

DEADY J.

On December 23, 1886, the plaintiffs, citizens of the state of Illinois, and doing business in Chicago, under the firm name of T. W. Hall & Co., commenced this action against the defendant, George Weaver, a citizen of Oregon, as administrator of Hans Weaver, deceased, to recover the sum of $8,503.09, with interest from said date, as and for money theretofore advanced to W. F. Owens on the security of the bond of said Hans Weaver.

On the trial it was admitted that since the commencement of the action the plaintiffs had received from parties to said bond the sum of $3,663.10 on said demand, and the jury found a verdict for the plaintiffs for the remainder, $4,839.99, for which sum, with $171.20 costs and disbursements, the plaintiffs had judgment.

The defendant now moves for a new trial, and it will be necessary to a proper understanding of the matter to make a brief statement of the case.

It is alleged in the complaint that on January 7, 1886, the plaintiffs and W. F. Owens entered into an agreement whereby Owens was to purchase wool in Oregon, and consign the same to the plaintiffs for sale at Chicago, and on the receipt of a consignment of wool or an agreement to consign, together with a note equal to 10 cents a pound of said wool, the plaintiffs were to advance money to Owens on his drafts, to enable him to purchase wool; that in consideration of said undertaking on the part of the plaintiffs, said Owens as principal, and Robert Phipps, Noah Cornutt, and Hans Weaver as sureties, all of the county of Douglas and state of Oregon, on January 7, 1886, executed and delivered to the plaintiffs their certain writing obligatory, in and by which they acknowledge themselves 'held and firmly bound unto T. W. Hall & Co. in the full sum of $20,000 gold coin of the United States, to be paid to said Hall & Co., their assigns or legal representatives, for which payment well and truly to be made we bind ourselves, our heirs, executors, and administrators, jointly and severally, firmly by these presents;' conditioned as follows: 'That if the above bounden W. F. Owens shall well and truly pay unto the said Hall & Co., upon usual and proper demand, the sum or sums of money paid by said Hall & Co., or honored, so as to be paid on orders, checks, or drafts, overdrafts, notes, and demands or any of them whatsoever, by or from said W. F. Owens, principal aforesaid, to the said Hall & Co., in course of business properly directed, then, and in that event, this bond shall become null and void, and of no effect; otherwise the same shall be, remain, and continue in full force, virtue, and effect.'

It is also provided that 'this bond shall not be construed so as to require the said Hall & Co. to advance any sum or sums of money except as they may see fit;' and that 'the duration and existence of this bond and obligation may be terminated at the wish of the principal or any obligor,' after due notice to Hall & Co., 'and then only after all obligations and legal liabilities thereby assumed or arising therefrom have been fully and completely and in every respect legally discharged.'

The writing purported to be signed and sealed by said Owens, Phipps, Cornutt, and Weaver, 'in presence of C. M. Stephens and J. C. Simmons. ' Thereafter, on March 2 and April 9, 1886, and on four different days between said dates, the plaintiffs advanced Owens on his six promissory notes the sum of $8,000, of which only $322.11 was repaid by Owens; and the balance due thereon, with interest, amounted at the commencement of this action to $8,503.09.

On September 25, 1886, Owens died intestate and insolvent; and the claim has since been presented to the administrator of his estate, and allowed, but not paid for want of funds.

On May 26, 1886, Hans Weaver died, leaving a will, and on June 22, 1886, the defendant was appointed administrator with the will annexed, to whom the claim of the plaintiffs was duly presented for allowance, and by him rejected. The answer of the defendant consists of denials of any knowledge or information concerning the alleged agreement, bond, notes, and advances sufficient to form a belief.

On the trial the plaintiffs called the subscribing witness, C. M. Stephens, who testified that he signed the bond as a witness at the request of Owens, but that the other persons whose names appeared signed to the bond, as the makers thereof, were not present, and he did not see them or either of them sign the same. The plaintiffs then read in evidence the return of the marshal on a subpoena commanding him to summon J. C. Simmons, the other subscribing witness to the bond, to testify in this case, to the effect that said Simmons could not be found in the state. And thereupon, after the plaintiffs had given evidence tending to prove that the signature of Hans Weaver, appended to the bond, was his genuine signature, the same was admitted in evidence. In the course of the trial the court ruled that, (1) the addition of Stephens' name to the bond as a subscribing witness, after its execution by the makers thereof, under the circumstances disclosed in his evidence, did not affect it as an instrument of evidence in the hands of the plaintiff, and instructed the jury that if Weaver signed the bond, as alleged, he was bound by it, notwithstanding the subsequent attestation by Stephens; and (2) the writing in question is not a simple guaranty, but a direct and absolute undertaking by the makers thereof, to pay Hall & Co. the advances made by them to Owens in the course of the business in which he was engaged, and instructed the jury it was not necessary that the plaintiffs should have given Weaver notice of the acceptance of the bond.

The motion for a new trial is based on some eight grounds, but those that were noticed in the argument may be condensed into two: (1) The bond or instrument sued on is a guaranty, and unless notice of the acceptance thereof by the plaintiffs was given to the obligors or makers, they are not liable thereon; (2) the alteration of the instrument by the addition of the name of a subscribing witness, C. M. Stephens, rendered it void.

In deference to the strenuous contention of counsel for the motion for new trial I have re-examined the question whether the writing signed by Owens and Weaver on January 7, 1886, made the latter a surety for or only a guarantor of the former, and I find neither reason nor authority for holding Weaver's undertaking to be anything different from or less than that of a surety. The terms 'surety' and 'guarantor' are often used in the books loosely and indiscriminately. They occupy certain ground in common, but there is a marked distinction, both in the form and effect of the undertakings.

This distinction is nowhere more clearly stated than in Brandt on Suretyship and Guaranty. The author says (section 1:)

'A surety or guarantor is one who becomes responsible for the debt, default, or miscarriage of another person. The words 'surety' and 'guarantor' are often used indiscriminately as synonymous terms; but, while a surety and guarantor have this in common, that they are both bound for another person, yet there are points of difference between them which should be carefully noted. A surety is usually bound with his principal in the same instrument, executed at the same time, and on the same consideration. He is an original promisor and debtor from the beginning, and is held, ordinarily, to know every default of his principal. Usually he will not be protected, either by the mere indulgence of the creditor to the principal, or by want of notice of the default of the principal, no matter how much he may be injured thereby. On the other hand, the contract of the guarantor is his own separate undertaking, in which the principal does not join. It is usually entered into before or after that of the principal, and is often founded on a separate consideration from that supporting the contract of the principal. The original contract of the principal is not his contract, and he is not bound to take notice of its non-performance. He is often discharged by the mere indulgence of the creditor to the principal, and is usually not liable unless notified of the default of the principal. * * * The principal and surety, being directly and equally bound, may be sued jointly in the same suit; while the guarantor, being bound by a separate contract, and only collaterally liable, cannot usually be joined in the same suit with the principal.'

In Kearnes v. Montgomery, 4 W.Va. 29, it is said:

'The contract of a guarantor is collateral and secondary. It differs in that respect from the contract of a surety, which is direct; and in general the guarantor contracts to pay if, by the use of due diligence, the debt cannot be made out of the principal debtor; while the surety undertakes directly for the payment, and so is responsible at once if the principal debtor makes

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