Opinion · Supreme Court of North Carolina

Shewell v. . Knox

Shewell v. . Knox, 12 N.C. 404 (N.C. 1828)

Type: Opinion
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Date: 1828-06-05
Topic: general

Ham., Judge. In this case, it is objected to the Plaintiff’s recovery, that he did not give to the guarantors early notice, that he looked to them for payment; and the case, of McIver v. Richardson, ( 1 Maule & Selwyn, 557) is relied upon. In that rase, Lord Ellenhorough says there was only an offer to guaranty, not a complete guarantee, and on that ground the case was decided. But in this case the guarantee is complete, and the parties so contemplated it, for it, was their understanding of it, that Bnrgess should procure the goods upon it before he returned, and in fact he did. so.

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SHEWELLv. KNOX,12 N.C. 404(1828)

THOMAS SHEWELL v. AMBROSE KNOX.

Supreme Court of North Carolina

June Term, 1828.

From Chowan.

1. Per TAYLOR and HENDERSON, Judges: A general letter of credit addressed to no particular individual is not a guarantee, but a proposal for one, and notice of an advance on the faith of it must be given to the guarantor.

2. Per HALL, Judge: Such a letter is an absolute guarantee, and notice of an advance is unnecessary to charge the guarantor.

3. What degree of diligence a creditor must use to bind a guarantor,quaere. But loss from neglect on his part is a matter of defense for the guarantor, and if not shown by him in the trial a new trial will not be granted simply because indulgence has been shown to the principal debtor.

THE plaintiff declared inassumpsit, and on the trial on the Fall Circuit of 1826 read the following letter:

"William G. Burgess and Josiah Jordan, of Elizabeth City, being desirous of entering into the commercial business, and W. G. Burgess for the purpose of purchasing goods for the said concern is about going to the north, and subscribers having been long acquainted with them, and having full faith in their honesty and integrity, recommend them as entitled to the confidence of merchants in Philadelphia, and are willing to hold themselves responsible for the payment of purchases made at this time, not exceeding the amount of $2,000.

"WILL T. MUSE.

"This 30 September, 1822." "AMBROSE KNOX.

He then proved that in the month of October, 1822, in consequence of this letter, he furnished Burgess with goods to the amount of $2,740, at six months credit. The following letter was then put in and read by the plaintiff:

"ELIZABETH CITY, 18 September, 1823.

"MR. THOMAS SHEWELL.

"SIR: — Your letter addressed to William T. Muse and myself, informing us of the nonpayment of the debt contractedPage 269with you by Burgess Jordan, of this place, so far as we are bound on our letter of credit given them some time in the fall of 1822, was received by Mr. Muse, who, having since died, I am at this moment without any correct information as to the amount of your claim against the said B. and J. Mr. Burgess expects to be in Philadelphia in a very short time, and I understand the house has made a shipment of wheat to your place, which I calculate is intended for the liquidation of the debt for which the late Mr. Muse and myself are responsible. The object of this letter is to request of you to use your best endeavors to obtain a full payment from Mr. B. for your claim against B. and J., or, in failure thereof, immediately to transmit to some attorney here the amount and voucher of your claim, with directions to proceed on the receipt thereof to the enforcing of payment. My becoming responsible from motives of friendship to Mr. Jordan, of said firm, and hearing that a dissolution of partnership will take place, besides being very desirous of having their affairs, so far as I am responsible, settled, causes this request.

"I have also understood that a shipment of wheat has been made by them to New York, the proceeds of which, I doubt not, are now ready for their disposal, and perhaps you may make an arrangement with Mr. B. to obtain payment for your whole claim. Your immediate and particular attention will much oblige, Yours respectfully,

"AMBROSE KNOX."

Burgess was examined by the defendant, and proved (406) that in the fall of 1823 he shipped a quantity of wheat to New York and Philadelphia, nearly sufficient in amount to discharge the debt due the plaintiff; that directly after the shipment he went to the north, and called upon the plaintiff in Philadelphia, who informed him that his sureties had requested an action might be brought against him; that he stated to the plaintiff the shipment of wheat, and the utter impossibility of his doing anything until its arrival, or until it was lost, so as to enable him to call upon the underwriters; that he went on to New York, where he was arrested at the suit of the plaintiff, and was discharged upon delivering orders to the consignees of the wheat to pay the net proceeds of it to the plaintiff; that no directions were asked for by the plaintiff, or given by him, as to the application of those proceeds; that the wheat turned out to be damaged, and only netted $400,Page 270which was paid to the plaintiff, and that in the ensuing fall or winter the copartnership of Burgess Jordan became insolvent.

His Honor,Judge Paxton, charged the jury that from the terms of the letter of guaranty the plaintiff ought to have given notice to the defendant that he held him responsible upon the guaranty. His Honor left it to them to say whether such notice had been given, and told them that if they inferred it from the letter of the defendant of 18 September, 1823, they ought to find for the plaintiff, as the notice was in law reasonable.

A verdict was returned for the plaintiff, and the defendant appealed.

Gaston for the defendant.Hogg and Badger for the plaintiff.

HALL, J., dissenting.

In this case it is objected to the plaintiff's recovery, that he did not give to the guarantors early notice that he looked to them for payment; andMcIver v. Richardson, 1 Maule and Selwin, 557, is relied upon. In that caseLord Ellenboroughsays there was only an offer to guarantee, not a complete guarantee, and on that ground the case was decided. But in this case the guarantee is complete, and the parties so contemplated it, for it was their understanding of it that Burgess should procure the goods upon it before he returned, and in fact did so.

But the defendant Muse had noticed that their guarantee was relied upon for payment; and this is evidenced from Knox's letter. At what time the notice was received does not appear. But the defendant thought it important; he had it in his power to show it, by producing the letter. This he has not thought proper to do. Besides, Burgess Jordan resided in Elizabeth City, where, or near to which, it may be inferred that the defendant and Muse also lived; for Knox's letter bears date at that place, and it appears from that letter that Knox had a knowledge of their situation, when he informed the plaintiff of the shipment of the wheat as a means of payment. It may, therefore, be taken for granted that they had notice, and had it in their power to secure themselves against loss in case it was practicable.

It appears that the plaintiff made an effort to procure payment from Burgess in the fall of 1823, but failed in effecting it; that in that fall, or the winter following, Burgess Jordan became insolvent.Page 271

No objection was made on the trial, or evidence offered (412) to show that an injury was sustained, either for the want of early notice to the guarantors that they were looked to for payment, or that the plaintiff had been guilty of neglect or laches in not endeavoring to procure payment from Burgess Jordan.

This case is not to be tested by principles which govern negotiable instruments, but the principles of fair dealing and common sense. If no loss was sustained for want of early notice, such notice need not be proved. If no loss was sustained by not suing Burgess Jordan, it was unnecessary to bring suit. This is established byWarrington v. Furbor, 8 East, 246;Williams v. Collins,6 N.C. 47;s. c.,4 N.C. 580;Oxley v.Young, 2 Hen. Bl., 613;Peel v. Tatlock, 1 Bos. and Pul., 419.

TAYLOR, C. J.

This cannot be taken as guarantee, but as a proposition for one, inasmuch as the address was general to the mercantile world, and not specific to any one individual; it was, therefore, incumbent upon the person who delivered goods upon the faith of the letter to give within reasonable time notice to the persons making the engagement. The guarantee became liable in point of law to make reasonable efforts to recover the money, and the guarantors became bound that those exertions should prove successful. That a notice was given at some time appears manifestly from the answer written to the plaintiff, in relation to the letter to Muse, by the production of which the defendant might have shown when it was given, and the nonproduction of which furnishes a presumption that, in point of fact, the notice was given in due time.

The question whether due exertion would have procured satisfaction from the debtor, was not discussed in the court below, as may be inferred from the record; the propriety, therefore, of granting a new trial or of refusing it depends on whose duty it was to bring that subject before the court, and we think it was the duty of the defendant, for clearly it was a ground of defense, that due exertion had not been made, and not (413) the ground of charge that it had been made.

If the defendant can show that the debt has been lost through the plaintiff's neglect, it is an answer to this action, because the defendant undertook for no more.

As to the plaintiff's discharging one of the principal debtors, when arrested in New York, it must be taken for granted that no loss was sustained by the defendant, for he has shown none; the law does not in this case, as in negotiable instruments, require any specific acts of diligence, but puts the question onPage 272the broad and liberal ground of reasonable exertions, and loss through the want of them. If we could collect from the case that these grounds of defense were offered to the court, and overlooked by it, we should be disposed for that reason to award a new trial; but this does not appear, and we must refuse it.

HENDERSON, J., concurred with the CHIEF JUSTICE.

PER CURIAM. Judgment affirmed.Approved: Farrow v. Respass,33 N.C. 170;Crook v. Cowan,64 N.C. 743;Straus v. Beardsley,79 N.C. 59;Leach v. Flemming,85 N.C. 448;Cowan v. Roberts,134 N.C. 420.