Thomas v. Dodge

• Decision Date: 06 April 1860
• Citation: 8 Mich. 51
• Court: Michigan Supreme Court
• Parties: John Thomas and others v. Cyrus C. Dodge

8 Mich. 51

John Thomas and others v. Cyrus C. Dodge

Supreme Court of Michigan

April 6, 1860

Heard January 6, 1860

Cases reserved from Ingham circuit.

In November, 1856, one Davidson executed and delivered to defendant a promissory note for $ 200, payable eighteen months after date, to defendant or bearer. January 2, 1857 defendant sold this note to plaintiffs, and at the same time indorsed thereon the following guaranty: "I guarantee the collection of this note. January 2d, 1857. C. C Dodge."

Plaintiffs in October, 1858, put this note in judgment against Davidson, before a justice of the peace, and execution was afterwards issued on this judgment and returned unsatisfied. Plaintiffs then brought suit upon the guaranty.

The cause being tried by the circuit judge without a jury, the judge found from the evidence that Davidson had no goods or chattels liable to execution, from the time the note came due until the return of the execution, but that he was all that time owner of a house and lot in Lansing, worth $ 1,000, and was a householder occupying the same with his family, but had no other real estate.

The defendant objected on the trial to any evidence showing to whom such guaranty was made, and the same was taken subject to the objection. He also objected to a recovery.

First. That said guaranty is void and inoperative, because it does not show with whom the contract of guaranty was made; and that parol evidence showing that fact was inadmissible.

Second. That before plaintiffs are entitled to recover, they must exhaust their legal remedy against Davidson, which could only be done by procuring an execution against the real as well as the personal estate of Davidson.

And these objections the circuit judge reserved for the opinion of this court.

Plaintiff entitled to judgment.

J. W. Longyear, for plaintiffs:

It was competent to show by parol with whom the contract of guaranty was made: 19 Wend. 565; 26 Wend. 436; 13 Mass. 158; 6 Wend. 637, 644.

A proper return of no property to the justice's execution made out a prima facie case against defendant. To defeat the action, defendant must show that the maker had real estate of some value liable to be sold on execution: 11 Wend. 629; 4 Hill 650; 4 Cow. 173; 1 Caines 437.

O. M. Barnes, for defendant:

1. The statute of frauds requiring the contract to be in writing, all the essentials of the contract must be in writing. And unless the name of the guarantee appears in the guaranty, or can be certainly ascertained by reference to the instrument guarantied, the guaranty is void: 1 N. H., 157; 5 Esp. 240; 4 B. & P., 253; 10 Conn. 192; 3 Johns. 419; 14 Wend. 231; 5 Hill 145; 5 Barb. 503; 25 Barb. 625. To allow parol proof as to who was the guarantee, would allow that to rest in parol which the statute requires to be in writing. See 1 Greenl. Ev., § 86; 4 Seld. 213.

2. It was necessary for plaintiffs to exhaust their legal remedies against the maker of the note, and this they have not done until they have had execution against the real as well as the personal estate. In case of a demand of this size, an execution against lands may reasonably be supposed to have been within the understanding of the parties at the time the contract was made. It can not be supposed that defendant meant to engage that Davidson should have goods and chattels enough alone to satisfy so large a debt.

For a construction of the language used in this guaranty, see 2 Am. Lead. Cas., 96 to 99; Edw. on Bills, 234 to 238; 1 Wend. 457; 19 Johns. 69; 13 Wend. 543; 14 Wend. 231; 4 Cow. 188.

3. Suit should have been immediately brought on the note when due, in order to comply with the conditions of the guaranty. See 19 Johns. 69, and cases above cited.

Campbell, J. Martin, Ch. J. and Manning, J. concurred. Christiancy, J. did not sit in this case.

OPINION

Campbell J.:

The first objection to the recovery by the plaintiffs is made upon the ground that, by omitting to name any person to whom the guaranty of collection was made, the contract failed to comply with the statute of frauds, which requires a writing.

There are many cases in which a liability may be created against a person for the debt of another, without mentioning the name of any creditor; the guarantor's proposition, being in the nature of an open offer closed by acceptance of it. And Mr. Burge lays it down as a general proposition, that the name of the creditor to be secured may be established by parol: Burge on Suretyship, 31, citing Bateman, v. Phillips, 15 East, 272. There would seem to be no good reason for holding such a guaranty as the one before us void, if it were held to come within the statute.

But counsel have inadvertently overlooked the fact that when the owner of negotiable paper sells it, and accompanies the sale by a guaranty, his undertaking being founded on a new consideration injuring to his own benefit, and not to that of the maker of the note, has been held in this state to take the case out of the operation of the statute entirely. This was decided in Jones v. Palmer, ...