Roberts v. Hawkins

• Decision Date: 08 June 1888
• Citation: 38 N.W. 575,70 Mich. 566
• Court: Michigan Supreme Court
• Parties: ROBERTS v. HAWKINS.

38 N.W. 575

70 Mich. 566

ROBERTS v. HAWKINS.

Supreme Court of Michigan

June 8, 1888

Error to superior court of Grand Rapids; EDWARD A. BURLINGAME Judge.

Assumpsit, by Helen M. Roberts against Lewis E Hawkins, as guarantor of the payment of a promissory note. Judgment for plaintiff. Defendant alleges error.

Defendant's contract was secondary, contingent, and conditional. Tinker v. McCauley, 3 Mich. 188; Bank v. Haynes, 8 Pick. 423; Talbot v. Gay, 18 Pick. 534; Parkman v. Brewster, 15 Gray, 272; Sage v. Wilcox, 6 Conn. 93; Read v. Cutts, 22 Amer. Dec. 184; Lane v. Levillian, 37 Amer. Dec 769; Beebe v. Dudley, 59 Amer. Dec. 341, 2 Daniel, Neg. Inst. � 1752. It was plaintiff's duty to give defendant notice of the non-payment of the note at maturity, or within a reasonable time.

It is not necessary in Michigan in order to hold the guarantor of payment, that immediate notice should be given to him of the nonBFpayment of the note guarantied. Tinker v. McCauley, 3 Mich. 193. The weight of authority is that a guarantor is not discharged by neglect to give notice of non-payment within a reasonable time. Lee v. Dick, 10 Pet. 496; citing Allen v. Rightmere, 20 Johns. 365. Failure of the creditor, even at the request of the surety, to enforce his demand against the principal, will not have the effect to release the surety, in Michigan. Insurance Co. v. Soule, 51 Mich. 316, 16 N.W. 662; Inkster v. Bank, 30 Mich. 143. While defendant is, as to the maker of the note, only a surety, yet as to plaintiff he is an original promisor; and, when the note became due, an immediate right of action was in plaintiff upon this guaranty. Trimble v. Thorne, 16 Johns. 151; Gage v. Bank, 79 Ill. 62; Donley v. Camp, 22 Ala. 659. That the maker was solvent at the maturity of the note, and became insolvent afterwards, does not release the guarantor from his liability. Bank v. Kercheval, 2 Mich. 515; Hungerford v. O'Brien, (Minn.) 34 N.W. 161; Brown v. Curtiss, 2 N.Y. 226; Bank v. Sinclair, 60 N.H. 106.

J. C. Fitz Gerald, (Charles Chandler, of counsel,) for appellee.

LONG J.

January 12, 1884, one Lyman D. Follett made his promissory note as follows: "$1,000.00. GRAND RAPIDS, MICH., January 12, 1884. One year after date, I promise to pay to the order of Helen M. Roberts one thousand dollars, with interest at eight per cent. per annum. Value received. LYMAN D. FOLLETT." And defendant signed an indorsement on the back thereof, as follows: "For value received, I hereby guaranty the payment of the within note. L. E. HAWKINS." On the delivery of this note to the plaintiff, she paid Follett $1,000. January 8, 1885, seven days before this note became due, Follett paid one year's interest; and neither at that time, nor at the maturity of the note, was the same presented to Follett or defendant for payment. No notice of non-payment was given defendant then or at any time prior to June 8, 1887. January 15, 1886, Follett paid the interest for the next year, and January 17, 1887, for the year following. About June 8, 1887, the note being then two years and five months overdue, it was first presented to defendant, and payment demanded and refused. August 13th this suit was brought. On the trial, plaintiff having proved the note and guaranty, and its non-payment, rested. Defendant then sought to make his defense as pleaded, and offered to show (1) that he was an accommodation guarantor, without consideration or security; (2) that, at or about the maturity of the note, he inquired of the maker of the note if it was paid, and was told it was; (3) that neither at the maturity of the note, nor at any subsequent time, prior to June 8, 1887, was any notice of the non-payment of this note given to defendant, nor any demand made on him for the payment thereof; (4) that at the maturity of this note, and for some considerable time thereafter,-at least a year,-Follett, the maker of the note, was solvent, and had property out of which defendant could have procured him to pay the note or obtained security; (5) that when defendant, on June 8, 1887, learned of the non-payment of this note, the maker was insolvent, out of the jurisdiction, and that he could then obtain no security or payment. The court directed a general verdict for plaintiff on all the counts of the declaration. Judgment being entered on the verdict in favor of plaintiff for the amount of the note, and interest, defendant brings the case into this court by writ of error. The declaration contains three counts. The first alleges the guaranty, demand of the maker at maturity, non-payment, and notice of said demand and non-payment to defendant at maturity. The second alleges that guaranty, the refusal by maker to pay at maturity, and notice to defendant, at maturity, of maker's refusal. The third is the common counts in assumpsit, with copy of note annexed, and an alleged indorsement on back of L. E. Hawkins, without any guaranty over it. The plea is the general issue, with notice of the defense of release by plaintiff, failure to give notice of non-payment to defendant, and the consequent damage and loss to him thereby.

It is claimed that the court erred in receiving the note and guaranty in evidence under the third count in plaintiff's declaration, for the reason that the note and guaranty offered were not the note and guaranty set forth in that count; that the contract set out in plaintiff's third count was that defendant had indorsed his name in blank of the back of the note, not payable to his order; and that this would make him a maker of the note, and liable as such, while the note offered had a guaranty of payment indorsed thereon. Defendant claimed that this was a variance, and that the court should have excluded the guaranty under this third count, and confined the verdict to a recovery under the first two counts. As we view the case, however, this objection has no force. The plaintiff being entitled to recover under the first and second counts of the declaration, the defendant was not prejudiced in the course taken by the court in not withdrawing all consideration of the case under the third count. The declaration was sufficient in the first two counts to allow a recovery thereunder.

The chief error complained of is the exclusion of the entire defense, and the direction of a verdict for plaintiff. On the trial the plaintiff proved by a witness the application for the loan, the loaning of the money, the giving of the note and guaranty, and, after reading the note and guaranty in evidence, rested. The defendant was then called and sworn as a witness in his own behalf, and was asked by his counsel: " Question. When that note became due, in January, 1885,-January 15th,-was any notice given you of the fact that it remained unpaid?" To this question counsel for plaintiff objected, that the same was irrelevant and immaterial, that the defendant was not an indorser nor guarantor of collection, but of payment of the note. Counsel for the defendant then offered to show by the witness that he had no notice of the non-payment of the note prior to June 8, 1887; that he was an accommodation guarantor without security; that, at or near the maturity of the note, he inquired of the maker, and was informed that it was paid; that, at the time, the maker of the note was solvent, and for some considerable time thereafter,-probably a year,-and that the defendant could, if he had any knowledge of its non-payment, have secured himself, or procured the maker to pay it; that, when the defendant learned of the non-payment of the note, the maker was insolvent, and out of the state, and no security could have been obtained by the defendant. The counsel then saying "that this, of course, is the line of defense marked out by the notice in the pleadings. It is all covered by my brother's argument; and, if we had no right to show that defense, then of course, there remained nothing but for the court to direct a verdict for the amount of the note, and interest." The court sustained the objection, and directed a verdict for plaintiff. In considering the case, the defendant's offer to prove this state of facts must be taken as true. Insurance Co. v. Manufacturing Co., 31 Mich. 356. Under this offer by the defendant, the issue is made, is a person not being a party to a promissory note, who, at its date and before delivery, and for the purpose of having a loan made upon the strength of his guaranty, guaranties the payment of such note, liable thereon in case the note is not paid at maturity, without notice of non-payment having been given to him by the holder at the maturity of the note, or within a reasonable time thereafter, or that in case notice is not given, and no proceedings taken to collect the note from the maker, and the maker of the note, at the maturity thereof, was solvent, and subsequently, and before suit is brought on the guaranty, becomes insolvent, can such guarantor, when such action is brought against him, set up such insolvency as a defense? The defense being based on plaintiff's laches in not giving notice to defendant of the non-payment of this note at maturity, and the consequent damage to defendant thereby, the correctness of the court's ruling depends on whether or not there rested on the plaintiff the duty to give such notice under any circumstances. The defendant claims that his liability existed only on the happening of a contingency and the performance of a condition; that whether or not that contingency happened, or condition was performed, was matter peculiarly within the knowledge of the plaintiff, and not within his own; and that if plaintiff intended to assert the performance of the condition, or the happening of the contingency, whereby...