Shoffstall v. McDaniel

• Decision Date: 03 January 1893
• Docket Number: 231
• Citation: 25 A. 576,152 Pa. 598
• Parties: Shaffstall v. McDaniel, Appellant
• Court: Pennsylvania Supreme Court

25 A. 576

152 Pa. 598

Shaffstall v. McDaniel, Appellant

No. 231

Supreme Court of Pennsylvania

January 3, 1893

Argued October 4, 1892

Appeal, No. 231, Oct. T., 1891, by defendant, John H McDaniel, from judgment of C.P. Venango Co., on verdict for plaintiff, W. P. Shaffstall.

Assumpsit on agreement of suretyship.

On the trial before TAYLOR, P.J., it appeared that defendant had indorsed a judgment note under seal of which he was the payee and over his indorsement was written, it did not clearly appear by whose direction, the following: "I guarantee the within note's payment." The other facts appear in the opinion of the Supreme Court.

Defendant's points were, among others, as follows:

"1. That under the law and the evidence the verdict of the jury should be for the defendant. Answer: We submit that question to you." [1]

"2. If the jury believe the evidence, that Frazier, who held the note when due, extended the time of payment thereon ten days and, during the said ten days, Deming, the maker of the note, so disposed of his property that nothing could be collected from him by process of law, McDaniel was thereby relieved from any contract he may have entered into guaranteeing or securing the payment of said note. Answer: That is true if you find it was a contract simply of guaranty, as expressed on the back of that note. But if you find it a contract of suretyship, it would make no difference whether he gave him time or not. He would be liable at all events." [2]

"3. If the jury believe the evidence that when the note in question fell due, and for sometime thereafter, Deming, the maker, had property which could have been seized and sold in satisfaction of a judgment entered thereon, and that no attempt was made to collect said note from him, either then or at any time thereafter, their verdict should be for the defendant. Answer: That is affirmed if you find that the contract was, as expressed on the back of this note, of guaranty." [3]

Plaintiff's points were as follows:

"1. If the defendant guaranteed to plaintiff that if the note in evidence was not paid when due he would pay it himself, this was a contract of suretyship and not of guaranty, and plaintiff could proceed at once against defendant, as soon as the note became due and unpaid, without regard to the solvency or insolvency of Deming. Answer: That is true. There is a good deal of difference between a man guaranteeing the payment of a note and guaranteeing the payment of a note when due. This is affirmed with that qualification." [4]

"2. That an extension of time by a creditor to release a surety must be upon a consideration, and one that can be enforced against the creditor. Answer: If the contract was one of suretyship, that is correct." [5]

"3. That the alleged extension by Frazier, if made at all, was made after the note was due, and without any consideration, and cannot therefore have the effect of releasing the defendant. Answer: That is true. If made afterwards there must be a new consideration for it in order to make it binding." [6]

Verdict and judgment for plaintiff for $139.13; defendant appealed.

Errors assigned were (1-6) instructions, quoting them.

The same thing must be said of the answer to the defendant's fourth point. The plaintiff might have complained of it, but the defendant cannot. We find nothing on this record that requires us to sustain this appeal, and the judgment is accordingly affirmed.

Robert F. Glenn, for appellant. -- The language of defendant's indorsement makes this contract a guaranty: Bank v. Eyer, 58 Pa. 97; Mizner v. Spier, 96 Pa. 533; Ass'n v. Lichtenwalner, 100 Pa. 100; Zahm v. Bank, 103 Pa. 576; Hartman v. Bank, 103 Pa. 581. Diligence must be used against principal before resort to guarantee: Hoffman v. Bechtel, 52 Pa. 190. Parol evidence was inadmissible to vary terms of contract: Martin v. Berens, 67 Pa. 459; Coughenour v. Suhre, 71 Pa. 463; McClure v. R.R., 90 Pa. 269; Rowand v. Finney, 96 Pa. 192; Thorne v. Warfflein, 100 Pa. 519; Smith v. Ins. Co., 103 Pa. 177; Jackson v. Payne, 114 Pa. 67. As there was no allegation of fraud or mistake: Phillips v. Meily, 106 Pa. 536; North v. Williams, 120 Pa. 109; Brawdy v. Brawdy, 7 Pa. 157; Thomas v. Loose, 114 Pa. 35; Miller v. Smith, 33 Pa. 386.

John O. McCalmont, with him S. P. McCalmont and Bryan H. Osborn, for appellee. -- The contract was to be gathered from the understanding of the parties: Frevall v. Fitch, 5 Wharton, 325. No writing was necessary: Malone v. Keener, 44 Pa. 107.

It was an original undertaking on defendant's part and his liability was fixed as soon as the note became due and unpaid: McBeth v. Newlin, 15 W.N. 129; Riddle v. Thompson, 104 Pa. 330; Campbell v. Baker, 46 Pa. 243; Koch v. Melhorn, 25 Pa. 89; Roberts v. Riddle, 79 Pa. 468. The evidence was sufficient: Ferguson v. Rafferty, 128 Pa. 337. The evidence of discharge was not sufficient: Brubaker v. Okeson, 36 Pa. 519; Hagey v. Hill, 75 Pa. 108.

Before STERRETT, GREEN, WILLIAMS, McCOLLUM, MITCHELL and HEYDRICK, JJ.

OPINION

MR. JUSTICE WILLIAMS:

It is well settled that the payee of a non-negotiable instrument does not become an indorser by writing his name on the back of such instrument. Such act standing by itself imposes no liability on him whose name is so written: Leech v. Hill, 4 Watts, 448. But proof may be made to show the actual agreement of the parties under which the indorsement of the payee's name was made. If the agreement was that the payee should become responsible for the payment of the note by the maker either as surety or as guarantor, such agreement may be enforced if made upon a sufficient consideration. If, on the other hand, it was a simple undertaking to become liable for the debt of another, the agreement would be void under the statute of frauds: Wilson v. Martin, 74 Pa. 159.

In this case it appears that McDaniel held the note of A. L. Deming for one hundred dollars payable at fifteen months. The note was under seal and contained a confession of judgment with the usual waivers of stay of execution, right of inquisition and exemption. It was a non-negotiable note. McDaniel offered this note to the plaintiff in exchange for a horse, and was told that it would be accepted on condition that he McDaniel, would agree to become responsible for its payment. This he agreed to do, at the same time writing his name across the back of the note. The horse was then delivered, and the note with McDaniel's name upon the back of it passed into the hands of the plaintiff. Not long after the plaintiff offered the same note to Frasier, in exchange for another horse, who agreed to accept it on the same condition that he had imposed on McDaniel, viz., that the plaintiff would engage to see the note paid. This he did, and wrote his name also on the back of the note, and delivered it to Frasier, who wrote a guaranty of payment over his name. ...