The New York Fireproof Tenement Association, Appellant, v. Arthur F. Stanley and George L. Patterson, Respondents

The New York Fireproof Tenement Association, Appellant, v. Arthur F. Stanley and George L. Patterson, Respondents. Guaranty of the performance of a contract—when, although signed in a firm, name, the guaranty is an individual one of the partner signing it only — in the absence of a defense of the Statute of Hrauds an oral guaranty by the partner signing the writing may be shown. The complaint in an action brought against Arthur F. Stanley and George L. Patterson alleged that the defendants were copartners carrying on business under .the firm name of Stanley & Patterson; that the plaintiff entered into a contract with one Heaton, whereby Heaton undertook to perform certain work on premises belonging to the plaintiff; that, as an inducement to the plaintiff to enter into said contract, the defendants guaranteed the performance of the contract by Heaton in the sum of §1,000; that Heaton had failed to perform the contract and that the plaintiff had suffered damages to the extent of §969.37, for which amount judgment was demanded. Upon the trial the plaintiff introduced in evidence the contract between himself and Heaton, at the bottom of which contract was the following: “We severally and individually guarantee the foregoing contract as called for in specification.for Bell and Speaking Tube work, in the penal sum of One thousand dollars. “ STANLEY &• PATTERSON.” Such guaranty was signed by Stanley, who had no authority to sign it as agent for Patterson. Held, that upon its face the guaranty was not a firm obligation, but a several and individual one, and that as the complaint did not allege that the guaranty was executed by the defendants as copartners, and as it appeared that Stanley had no authority to sign the guaranty as agent for Patterson, the complaint was properly dismissed as to Patterson; That as the complaint did not allege whether the contract of guaranty was oral or in writing and as Stanley did not plead the Statute of Frauds as a defense, the plaintiff was entitled to prove as against Stanley an oral agreement of guaranty in addition to the written guaranty indorsed upon the contract; That the Statute of Frauds is not available as a defense unless pleaded. Appeal by the plaintiff, The New York Fireproof Tenement Association, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 12th day of January, 1905, upon the dismissal of the complaint by direction of the court after a trial at the New York Trial Term. Horace A. Davis, for the appellant. Herbert G. Kahn, for the respondents. [MAJORITY — Ingraham, J.:] Ingraham, J.: The complaint alleges that the defendants were copartners carrying on business under the firm name of Stanley & Patterson, and that on the 8th day of September, 1899, plaintiff entered into a •contract with one Heaton, whereby Heaton undertook and agreed to perform certain bell and speaking-tube work on plaintiff’s premises at Forty-second street and Tenth avenue, in the city of New York, and that at the same time and as an inducement to plaintiff to enter into said contract, defendants guaranteed performance of «aid contract by Heaton in the sum of $1,000 ; that said Heaton failed and refused to perform said work in accordance with the terms of the contract, and the plaintiff suffered damages to the ■extent of $969.37, and, therefore, demands judgment for that .-amount. 'The defendants answered separately; the defendant Stanley denying the allegations of the complaint and alleging that Heaton performed the contract; the defendant Patterson admitting the copartnership, but denying the other allegations of the complaint and alleging that Heaton performed the contract with the plaintiff, and that the alleged written guaranty was an individual and several guaranty for the performance of the alleged contract between Heaton and the plaintiff; that this guaranty was signed by the defendant Stanley without the knowledge and consent of the defendant Patterson, and that neither partner was authorized to make such guaranty by virtue of the partnership agreement. Upon the trial the defendant Patterson, called as a witness for "the plaintiff, testified that he was in partnership with the defendant •Stanley. He was then shown a contract between plaintiff and Heaton, and testified that the defendant Stanley, his partner, signed the name of Stanley & Patterson to the guaranty clause at the end •of that agreement; that at the time that instrument was executed the witness was in Canada, and he first heard of it a year and a half ■or two years afterwards. The contract between Heaton and the plaintiff was then introduced in evidence. It provided that Heaton was to furnish all the materials for the performance of the work" according to the specification entitled “ Specification for Bell and Speaking Tube work in the 42nd Street tenements at 42nd Street, and Tenth Avenue, New-York City.” At the bottom of that contract is the following: “We severally and individually guarantee the foregoing contract as called for in specification for Bell and Speaking Tube work, in the penal sum of One thousand dollars. “STANLEY & PATTERSON.”' Upon this instrument being introduced in evidence, the defendants moved to dismiss the complaint, and that motion was entertained upon the grounds that the guaranty was indefinite and that, it did not guarantee the plaintiff against loss upon the failure of Heaton, to complete the contract, but simply guaranteed the foregoing contract, as nothing appeared to show that it intended the performance of the contract by the plaintiff or by Heaton. In answer to this suggestion counsel for the plaintiff said: “ It seems-to me that that could not possibly have but that one meaning; and. we are further prepared to show that at the time this guaranty was-written thfe contractor, Heaton, had signed, and the Association, the owner, had not signed, and that is further evidence going to show what the meaning was.” After some further discussion, counsel for the plaintiff said: “We offer to prove the circumstances under which this guaranty was executed ■; that is, that the contractor took this guaranty to Messrs. Patterson and Stanley and told them that, in order to get the contract executed he would have to have it guaranteed by them; that the plaintiff insisted on that. * * * We-will prove that the inducement to the defendants —.” Whereupon the court interposed : “ You can offer a lot of proof, but you- cannot use that proof.” The motion was then granted, to which,plaintiff: excepted. ° As the plaintiff was not allowed to introduce his evidence, if facts , alleged in the complaint stated a cause of action based upon the written instrument supplemented by evidence of a verbal contract, the court should have allowed the testimony to be given and it was error to dismiss the complaint. The allegations of the complaint are, that on the 8th day of September, 1899, the plaintiff entered into a contract with Heaton, and that at the same time and as an inducement to plaintiff to enter into said contract, defendants guaranteed the performance of said contract by said Heaton in the sum of $1,000. The undertaking indorsed on the contract between Heaton and the plaintiff was signed by the defendant Stanley and by it the defendants “ severally and individually guarantee the foregoing contract as called for in specification for Bell and Speaking Tube work, in the penal sum of One thousand dollars.” This upon its face was not a firm obligation, but a several and individual one. It is clear that no action against the partnership could be sustained. The plaintiff’s evidence showed that Stanley had no authority to sign the instrument as agent for Patterson, and it is not alleged to be a copartnership agreement. The complaint as to Patterson was, therefore, properly dismissed. The remaining question is whether the plaintiff, upon the allegations of the complaint, was entitled to prove a verbal guaranty or a guaranty partly verbal and partly in writing, by which the defendant Stanley guaranteed the performance of the contract by Heaton. The complaint does not allege whether the contract of guaranty was in writing or verbal, and the Statute of Frauds was not pleaded as a defense. The plaintiff claimed that he could have supplemented the written instruments by testimony to show that Stanley did guarantee the performance of the contract by Heaton. While it is alleged in the complaint that the defendants were copartners, the contract of guaranty is not alleged to have been executed by the defendants as copartners. Under this allegation, I think, the plaintiff should have been allowed to prove a verbal guaranty by Stanley. It is now settled in this State that the Statute of Frauds must be pleaded as a defense. (Crane v. Powell, 139 N. Y. 379; Sanger v. French, 157 id. 213; Matthews v. Matthews, 154 id. 288.) If the plaintiff, therefore, can prove a verbal undertaking by Stanley to guarantee the plaintiff against loss by the failure of Heaton to complete the contract, I can see no reason why upon proof of such a verbal agreement, supplemented by this individual promise of Stanley indorsed upon the contract, a cause of action against Stanley would not have been established against him. For this reason, I think, the judgment in favor of Stanley against the plaintiff must be reversed. It 'follows, therefore, that the judgment in favor of Patterson must be affirmed, with costs; and the judgment in favor of Stanley must be reversed and' a new trial ordered, with costs to the appellant to abide the event. McLaughlin and Laughlin, JJ., concurred; Patterson, <L, concurred in result. As to Patterson, judgment affirmed, with costs. As to Stanley, judgment reversed, new trial ordered, costs to appellant to abide event.