Connecticut. Supreme Court of Errors.

Connecticut reports: containing cases argued and determined in ..., Volume 50 online

. (page 2 of 61)
Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 50 → online text (page 2 of 61)
Font size
QR-code for this ebook

avoid the Burr claim, then in a suit against him such con-
veyance was void, and the property so conveyed could be
attached by the plaintiffs, then his creditors, and taken
upon execution as his own estate, notwithstanding the con-
sideration paid therefor by his wife."

6. " When the intent is ascertained in respect to a con-
veyance, the law pronounces whether it is fraudulent or
not. It being admitted by Mr. and Mrs. Benedict, and
entirely undisputed, that the conveyance of April 28th,
1878, was made in part on account of the pendency of the
Burr suit, which had been commenced three days before,
and in fear of and to avoid the possible consequences of
that suit, such intent was in law fraudulent."

7. " The voluntary payment by Mrs. Benedict in 1863
of her husband's debts, did not create the relation of debtor
and creditor between them, and was, in respect to his
creditors existing in 1873, no consideration for the convey-
ance at that time."

8. "The payment by Mrs. Benedict in 1863 for the
benefit of her husband, would not, as against his creditors
in 1873, entitle her to then make a claim legal or equitable
against him or his property for anything beyond the actual
consideration by her paid. At most she could have only
an equitable claim for the amount actually paid."

9. " If the jury find the consideration of the conveyance
from Benedict to his wife in 1873 was grossly inadequate,
she acquired as against his then existing creditors only such
an interest in the property as would be a fair equivalent for
the actual consideration. In such case the remaining

Digitized by VjOOQIC

MARCH TERM, 1882. 17

Allen V. Rundle.

interest in the property could be appropriated by his then
existing creditors."

10. "If the jury find that the plaintiffs, without the
knowledge of the defendants or either of them, assisted
Benedict to convey away all his property to his wife for an
inadequate and antecedent consideration, and with the
intent to avoid the result of the Burr suit then pending,
and took no steps to avail themselves of Benedict's
property, and advised him not to pay the note in suit,
they cannot recover."

13. " If a. holder of a note has lost his remedy against
the guarantor by neglect or laches, a subsequent promise
on the part of the guarantor to pay will not revive the

The judge did not charge in writing, but only orally,
upon these requests, and instructed the jury as follows upon
them respectively.

In relation to the fourth request : " If it was void, any
creditor could pursue it. K void, it did not pass the title
out of Benedict, except as it is governed by our statute."

In relation to the sixth request : " The first paragraph is
true as a proposition of law. These fraudulent convey-
ances to avoid a particular claim are by our statute limited
to such persons and claims."

In relation to the seventh request : " By the statute of
1863 the husband was entitled to the rents and profits of
his wife's real estate and the use of her personal property.
It is for you to say if there are any facts that bring that
within this case. As against creditors it would be void. It
is for you to inquire if any creditors complain. It is void
as to the Burr claim, if that is ever put into judgment.
Who is there here to complain ? "

In relation to the eighth request : " That is correct, as
against creditoi*s. The question is, where are they and who
are they ? "

In relation to the ninth request : " It is a correct propo-
sition of law. Property can not be conveyed in large
amounts for a pepper-com. The question is, where are the
Vol. I.— 2

Digitized by VjOOQIC


Allen 0. Bundle.

creditor? It is not enough to speak of them on paper.
Where are they in court that do complain or can com-

In relation to the tenth request : " It is a connect legal
proposition. If Benedict, when the note fell due, had
property, they should have pursued his property. All that
refers to the Burr suit ; as I have said, our statute confines
the invalidity to the person sought to be defrauded, to wit,
to the holders of the Burr claim."

In relation to the thirteenth request : " If you think the
defendants knew they were not liable, and promised to pay,
that renews the obligation."

The defendants did not request the court to charge in
writing, and no exception to such omission was taken at
the time, nor until the filing of the present motion. The
judge read the requests to charge to the jury, and charged
upon each one orally as he read them.

The jury having returned a verdict for the plaintiffs, the
defendants moved for a new trial for errors in the charge of
the court and in the omission to charge as requested.

L, 2>. Brewster and S, Tweedy^ in support of the motion,
contended that it was the duty of the plaintiffs, if they
would hold the defendants on their guaranty, to have
brought suit against Benedict, or to show his utter insol-
vency, or to prove a waiver of such proceedings by the
defendants ; that the court erred in charging the jury that
a conveyance of his property by Benedict to defraud a
particular creditor was void only against that creditor ; that
such a conveyance being void against all creditors, and
therefore against the plaintiffs, the latter could have
attached the property and thus have secured payment of
the note ; that the evidence of the parol agreement of the
guarantors to pay the debt themselves, without any pro-
ceedings against Benedict, made at the time the note was
made, was inadmissible as varying the written guaranty, of
which the condition that diligence should be used in col-
lecting the note of the maker was a vital part; that it

Digitized by VjOOQIC

MARCH TERM, 1882. 19

Allen V. Rundle.

could not be admitted to prove a waiver of such proceed-
ings as it would be equally in conflict with the written con-
tract; and that the omission of the judge to charge in
writing upon the points presented in the written requests
of the defendants, such written charge being required by-
statute, was a ground for granting a new trial.

ET. S. Sanford and U. W. Seymour^ with whom was
TT. F, Taylor^ contra, contended that it was not necessary
to proceed against the maker of the note by reason of his
insolvency ; that if he was not insolvent, such proceeding
had been waived by the defendants, who were the actual
debtors, they having agreed that the note should not be
collected of the maker but that they would pay it them-
selves ; that their agreement to this effect, though it might
not be admissible to vary the written contract, was yet
admissible to prove a waiver ; that it did not affect the case
that it was made at the same time with the note, as it is a
well established rule that an endorser may, at the time of
his endorsement, make a parol waiver of demand and
notice ; that this agreement could operate as an estoppel on
the defendants, if in no other way ; that the charge of the
judge with regard to the effect of a fraudulent conveyance
upon other creditors was in accordance with the language
of our statute as to fraudulent conveyances; that if the
judge was wrong in this or any other of his rulings the
court could see clearly that justice had been done by the ver-
dict, and that where this was the case a new trial would not
be granted.

LooMis, J. On the 25th day of November, 1871, Charles
Benedict gave his note to the plaintiffs for the sum of seven
thousand dollars, payable on demand, with interest semi-
annually and taxes. On the back of this note was the
following written guaranty, signed by each of the defen-
dants: — "For value received, we jointly and severally
guarantee the within note good and collectible until paid."

Although the declaration has a wider sweep, yet it is con-

Digitized by VjOOQIC


Allen V. Bundle.

ceded that the plaintiffb must recover, if at all, upon the
contract of guaranty alone. All other grounds of action
are excluded by the decision of this court when this case
was previously before it. Allen v. Bimdle^ 45 Conn^ 628.

Guaranties are either absolute or conditional. If A
guarantees the collectibility or goodness of* E*% note to (7,
he does not absolutely guarantee its payment, but only that
he will pay it in the event that C shall test the collectibility
or goodness of the note by regular prosecution of suit
against jS, and shall be unable by due and reasonable dili-
gence to enforce its payment. 2 Daniels on Negotiable
Instruments, § 1769. In Edward* on Bills (2d Ed., side
p. 238,) the doctrine is more fully stated as follows : — " A
guaranty that a note is collectible is a conditional promise
binding upon the guarantor only in case of diligence. In
order to perfect the obligation so as to render him liable
thereon, the guarantee must use diligence in the endeavor
to collect his note, for it is a condition precedent. In other
words, the obligation, which is inchoate, does not become
absolute until the guarantee has performed the condition on
his part ; and it seems that if he fails to perform the condi-
tion precedent, so that in fact no obligation accrues and
becomes perfect against the guarantor, even a subsequent
and express promise to pay will not render him liable

In fixing liability on such a guaranty coui'ts of high
authority, notably those of the state of New York, hold
that the only evidence that the note is not collectible is the
failure of legal proceedings, diligently pursued, to result in
collection. Moakley v. Biggs', 19 Johns., 69; Thomas v.
Woods, 4 Cow., 173 ; Taylor v. Bullen, 6 Cow., 624 ; Cump-
Hton V. McNair, 1 Wend., 457 ; White v. Case^ 13 Wend.,
543; Loveland v. Shepard, 2 Hill, 139; Vdnderveer v.
Wright, 6 Barb., 547 ; Newell v. Fowler, 23 Barb., 92 ; G-al-
lagher v White, 31 Barb., 92 ; Mosier v. Waful, 56 Barb.,
80 ; Craig v. Barkis, 40 N. York, 181.

And the same rule has been adopted by the courts of Wis-
consin, Michigan and several other states. Borden v. Qilbert,

Digitized by VjOOQIC

MARCH TERM, 1882. 21

Allen r. Rnndle.

13 Wis., 670 ; Bossman v. Akeley, 89 Mich., 710. In the latter
case CooLEY, J., giving the opinion of the court, after an
able review of the authorities in the several states, referring
to the New York doctrine, says : — " We believe that rule to
be reasonable and to accord with the general understanding
of the parties when such guaranties are given. The under-
taking that a note is collectible, means that if legal proceed-
ings for collection are diligently prosecuted at law they
shall result in collection. It does not mean that the maker
of the note is responsible or shall remain responsible, but
that the debt shall be collected if the proper steps are
promptly taken for the purpose. It may be that an officer
would find attachable property where the witnesses knew
of none ; it may be that, with the large exemptions allowed
by law, the debtor would choose to make payment rather
than have the judgment stand against him, even when
payment could not be enforced."

On the other hand, the courts of Ohio, Pennsylvania,
Massachusetts, Maine and Vermont, while construing such
a guaranty in substantially the same manner, yet hold that
it is not necessary to institute a suit if the maker is insol-
vent, and they allow proof of the waiver of the condition
by the guarantor. Stone v. Rockefeller^ 29 Ohio St., 625 ;
McDoal V. Yeomans^ 8 Watts, 861 ; McOlurg v. Foyer ^ 15
Penn. St., 298 ; MileB v. LinnelU 97 Mass., 298 ; GHllighan
V. Boardman^ 29 Maine, 79 ; Wheeler v. Lewis^ 11 Verm.,
265 ; Bull v. Bli%s, 80 Verm., 127 ; Dana v. Conant, id., 246.

It is difficult to determine on which side is the weight of
legal authority. The question in this state may perhaps be
regarded as an open one. The only importance it has for
the purposes of the present case is its bearing upon the
question of evidence and upon the duty of the court rela-
tive to the thirteenth written request. If we adopt the
New York rule, it would logically require all evidence of
waiver to be rejected and a subsequent promise by the
defendants would not relieve the plaintiffs from the conse-
quences of their laches. We are not prepared to accept
this rule, notwithstanding the force of logic and weight of

Digitized by VjOOQIC


Allen V. Bundle.

legal authority by which it is supported. The principles
adopted by this court in the cases of Perkins v. Catlin^ 11
Conn., 213, and Ransom v. Sherwood^ 26 Conn., 437, and
the fact that it seems more just and equitable not to require
a suit, with all its attendant expenses and trouble, where
suit must be vain, incline us so to hold, and to allow under
some circumstances the diligence required by the law to be
waived by the party for whose benefit it is required.
Regard however must always be had to the terms of the
contract of guaranty. Where it is so explicit as to leave
no room for construction, that is, where the exact diligence
required is all stipulated in the contract — ^in such case,
though vain, the steps pointed out must all be taken, for
the reason that the court will not dispense with what the
parties have explicitly agreed to. Dwight v. Williams^ 4
AlcLean, 581 ; Moakley v. BiggSj 19 Johns., 69 ; Uddt/ v.
Stanton, 21 Wend., 255.

Accepting for the purposes of this case the more liberal
rule for the benefit of the plaintiffs, we must nevertheless
hold the guaranty a conditional one, and that the condition
is precedent and an essential part of the contract, and that
the burden of proof was therefore on the plaintiffs to show
by appropriate evidence, either that they first exhausted all
legal remedies without success, or that the maker was
insolvent, or that the guarantors in some proper manner
waived the legal proceedings.

The plaintiffs, in lieu of a strict performance of the con-
dition, relied upon two claims : — 1st, that the maker of the
note at the commencement of the present suit was notori-
ously and utterly insolvent, and 2d, that it was understood
between the maker, guarantors and payees of the note at
the time of its execution and delivery, that the maker had
signed it without consideration, at the request and for the
accommodation of the guarantors, and upon their promise
that they would take care of it and pay it within a short
time from its date.

The questions arising under the first claim will be here-
after considered in connection with the charge to the jury.

Digitized by VjOOQIC

MARCH TERM, 1882. 28

Allen V, Rundle.

The second claim will be considered first, in connection
with the objections to the admissibility of the testimony
offered by the plaintiffs to sustain it. The motion states
the evidence as follows : —

The plaintiffs offered evidence in chief to prove that
some time prior to November, 1871, the Bartram & Fanton
Sewing Machine Company was indebted to the plaintiffia in
the sum of $7,000 and was being pressed for payment ; that
William P. Seeley, one of the defendants, and who was
acting and managing for the company, of which he was a
stockholder, in paying off its debts, proposed to the plain-
tiffs, that as the company would want to use what ready
money it had, it would get up a note and get some one to
sign it, whom the stockholders, or some of them, would
indemnify, and would sign as guarantors on the back of the
note, and that they thought they could get Charles Bene-
dict to let them use his name; that thereafter Charles
Hull, one of the defendants, and also a stockholder in the
company, went to Benedict for the purpose of inducing
him to lend his name as maker of the proposed note, and
for that purpose promised him that he should never be
called upon to pay the note and that no harm should ever
come to him on account of his signing it, but that the
guarantors would pay it ; that afterwards Hull and Seeley
gave' the note to the plaintiffs in accordance with their
proposition so to do, and they and the other guarantors, all
of whom were stockholders in the company, told the plain-
tiffs that they had got Benedict's name, and had agreed to
protect him and to pay the note and that no harm should
come to him from signing it, and that the plaintiffs accepted
the note in payment of their claim against the company ;
that afterwards Benedict also informed the plaintiffs that
the defendants had promised to protect him, and that it was
agreed when he signed the note that he was not to pay it
and should have no trouble with it, but that the parties
who signed on the back of it should take care of it.

That part of the evidence which details a conversation
between the plaintiffs and Benedict, after the transaction,

Digitized by VjOOQIC


Alien 0. Bundle.

and not in the presence of the defendants, wherein Bene-
dict told the plaintiffs "that the defendants had promised
to protect him, and that it was agreed when he signed the
note that he was not to pay it, and should have no trouble
with it, but that the parties who signed on the back of it
should take care of it," was not only matter inter alios^ but
as against the defendants pure hearsay evidence which was
too clearly inadmissible to justify discussion.

Most of the remaining evidence objected to goes to estab-
lish at the very inception of the note a verbal agreement in
direct conflict with the written guaranty. But we must not
fail to give due prominence and consideration to the express
disclaimer on the part of the plaintiffs and the court that
the evidence was offered or received for the purpose of con-
tradicting the note or guaranty, but only to excuse the
plaintiffs' failure to test the collectibility of the note by
first bringing suit against the maker.

But notwithstanding the disclaimer it seems to us that
the evidence was admitted- in violation of the spirit and
reason of the rule, and it had the precise effect which would
result from a material change in the contract.

But it may be suggested that if parol evidence of a subse-
quent promise does not vary the contract, neither will an
antecedent or contemporaneous verbal agreement. We
think however there is good ground for a distinction
between antecedent and subsequent transactions in this
regard, arising from the reason of the rule which excludes
parol evidence and which merges all previous conversations
and negotiations in the deliberate language of the written
contract. To adopt the language of Judge Nott, in
McDovxdl V. Beckley^ 2 Constitutional Reports (S. C), 265,
— " The various conceptions of different minds on the same
subject, the liability of all persons to forgetfulness, the
influence of passion, prejudice or interest, render un-
written contracts at all times uncertain. But litera scripta
manet. It cannot change with times and circumstances,
and when a contract is I'educed to writing, the law presumes
the writing to contain the whole agreement." In Stone v.

Digitized by VjOOQIC

MARCH TERM, 1882. 26

Allen V. Bundle.

Rockefeller^ 29 Ohio St., 626, which was an action on a
written guaranty of the collectibility of a note, the court
say : — " The law will not supply any condition which is not
incorporated into the agreement, or fairly implied from the
language used; and in the absence of fraud, accident or
mistake, it is presumed conclusively that the terms of the
contract, as agreed between the parties at the time, are fully
expressed in the written guaranty."

But the plaintiffs in effect say, we do not vary the con-
tract between us and the defendants ; there it is, intact on
the back of the note; we base our action upon it. But
how* is it preserved intact ? From the same transaction,
from the same conversation, at the same time and place,
between the same parties, and upon the same subject
matter, the court allows to be proved two contracts, side
by side, one written, the other verbal; on^ a conditional
guaranty, the other an absolute promise to pay the note
without any condition whatsoever. But which is to pre-
vail ? Why, the written, of course, say the plaintiffs. But
how? Only in name, while the contemporaneous verbal
contract under cover of the doctrine of waiver in effept
nullifies it. Now it seems to us that this is a case for the
application of the presumption that the whole of the agree-
ment was committed to writing. This case strikingly
illustrates the necessity and wisdom of the rule. There
never was an instance of more direct and palpable contrti-
diction. It is incredible that the parties talked one thing
and wrote another so different at the same time and place
and with the same motives. If any waiver was agreed to
and any promise made, it was most natural to insert it in
the writing. But afterwards, with a change of circumstan-
ces and motives, it is reasonable to expect that parties may
waive some provision of a previously written contract ; so
that a contemporaneous and subsequent waiver do not rest
on the same ground.

In Q-oodtoin v. Buchman^ 11 Iowa, 808, cited by the
plaintiffs to support the admission of this evidence, there is
a clause in the opinion which seems to concede that there is

Digitized by VjOOQIC


Allen V. Bundle.

ground for the diatinction which we have been discussing.
That, like the case at bar, was an action on a guaranty of
the collectibility of a note. The waiver relied upon was,
^Hhat after the note matured the defendant told the
plaintiff not to sue it and that he would pay it himself.''
Wbight, J., in giving the opinion, says: — ''Treated as a
conditional promise, the guarantor, as a general rule, is
bound only in the event that the holder shall use diligence
to collect it of the maker. But that the use of this dili-
gence may be waived by the guarantor we have no doubt.
And if, at his instance and request and upon faith of his
promise, the diligence is not used, he is liable. It may he
admitted that a parol agreement^ made at thie time of the
guaranty^ to waive the ttse of diligence^ would not he admissi-
ble because of its conflict with the written agreement. ♦ ♦
In this case, however, the proof in no sense contradicted
the written guaranty, any more than proof of the waiver of
laches in the case of an ordinary indorsement of negotiable

The case of Cowles v. Townsend ^ Milliken^ 81 Ala.,
183, is distinguishable from the case at bar in several
respects, yet the reasoning of Stone, J., in giving the
opinion, we think is applicable. It was an action by payees
against the acceptor of a bill of exchange, in which the
defendant offered to prove by parol that he accepted the
bill under a verbal agreement with the payees to the effect
that, if the bill was not paid at maturity, the payees should
not call upon him until they had prosecuted the drawers to
judgment or insolvency and used all proper means to collect
the same. The judge says : — " The contract declared on in
this case is an absolute primary obligation to pay money.
The testimony which the court rejected was offered with a
view of proving a contemporaneous oral agreement of the
parties, that the liability of the appellant was not absolute
and primary, but contingent and secondary. Thus viewed
a more palpable attempt to vary by parol the terms of a
written contract cannot be presented.*'

We have not been able to find any case where a parol

Digitized by VjOOQIC

MARCH TERM, 1882. 27

Allen 9. Bundle.

contemporaneous agreement was admitted for the purpose
of showing waiver in an action upon a written guaranty
like the one under consideration. It is claimed however by
the plaintiffs that the law is well settled that an indorser of
a note may by parol waive demand of payment and notice
of dishonor of a bill, and that it may even be inferred from
circumstances, and the authorities they cite undoubtedly
sustain the claim. But such a waiver is a different thing
from the waiver of the collectibility of a note prescribed by
the parties in their contract ; and a waiver of a condition in
the contract at its inception is very different from that
founded on subsequent transactions or promises. And, as
to waiver of demand and notice in the case of an indorser,
it ought to be remarked that in Leffingwell v. White^ 1
Johns. Cas., 99, Mintum v. Fisher^ 7 Cal., 673, and Yeager
V. Farwell^ 13 Wall., 6, it was held " that as the written
indorsement is the highest and best evidence of the in-
dorser's contract, it could not be varied or modified by a
parol promise, and that consequently a contemporaneous
verbal promise by the indorser, to pay the note in the event

Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 50 → online text (page 2 of 61)