CAHILL IRON WORKS v. PEMBERTON

CAHILL IRON WORKS v. PEMBERTON. N. Y. Common Pleas, Special Term, July, 1893 ; and again October, 1893. 1. Pleading.] Where in an action upon a guaranty the complaint sets forth a writing alleged to contain the guaranty, but which is not sufficient under the statute of frauds in not expressing any consideration; a demurrer to the complaint for insufficiency is not frivolous. 2. Evidence ; presumptions?] In absence of evidence to the contrary, it will be presumed that the place where a contract is entered into is the place where it is to be performed. 3. The samel] An English statute which by the N. Y. Constitution (Art. I. § 17) is made the common law of this State, will be presumed to be the common law of another State in absence of any proof of its statute law. Pleading.] A complaint upon a guaranty which expressly alleges that it was given in consideration that the plaintiff would renew the note of a third person, is sufficient on demurrer, although it also sets forth a writing which purports to contain the guarantee, but which is defective under the statute . of frauds in not stating the consideration. Motion by plaintiff for judgment on a demurrer to complaint as frivolous ; and also (the motion having been denied) hearing upon demurrer. The action was brought by the Cahill Iron Works against Frank R. Pemberton. The complaint alleged that plaintiff was a foreign corporation, and that the defendant was engaged in business in Chattanooga, Tenn., under the firm name of F. R. Pemberton and Co.; that on March 25, 1891, the Kensing ton Land Co. was indebted to plaintiff for $703.99, and inconsideration that plaintiff would extend the time of payment and accept a ninety day note of said Land Co. in payment of said indebtedness, defendant agreed with plaintiff to give his written guarantee of the payment of the note at maturity, whenever the said Land Co. executed its promissory note in writing for seven hundred and three, dollars and ninety-nine cents ($703.99), payable ninety days after date ; that the defendant, under the name of F. R. Pemberton & Co., executed and delivered the following written guaranty: “Chattanooga, Tenn., March 25, 1891. “ The Cahill Iron Works, Chattanooga, Tenn. “ Dear SIRS :—-Referring to the ninety day note for seven hundred and three dollars and ninety-nine cents ($703.99), given you by the Kensington Land Co. in payment of bill rendered, we beg leave to say that we will guarantee the prompt payment of the note at maturity. “Yours respectfully, “ F. R. Pemberton & Co.” It was further alleged, that at the maturity of the note' the Land Co. applied for an extension of time of fifteen days, and in consideration that the plaintiff would-renew the note, defendant agreed to give his written guarantee of the payment of the same ; that the Land Co. executed a certain note in renewal [setting it forth], and pursuant to the foregoing agreement, the defendant, under the name of F. R. Pemberton & Co., on said last day executed to plaintiff the following guarantee: “With consent of the Cahill Iron Works, the Kensington Land Co. renewed the note above mentioned, viz : seven hundred and three dollars and ninety-nine cents ($703.99) for fifteen days, due July 15, 1891, the payment of which we guarantee. “ F. R. Pemberton & Co.” The presentment and non-payment of the Land Cbmpany’s note and notice thereof to defendant was also duly alleged. The complaint set forth, as a second cause of action, the guarantee by defendant of another note of the Kensington Land Co. in consideration that the plaintiff would extend the time of payment of an indebtedness of the Land Co. to him; and that the defendant gave the following written guaranty: “ Chattanooga, Tenn., April 22, 1891. “ The Cahill Iron Works, Chattanooga, Tenn. “ Dear Sirs :—Referring to the note of the Kensington Land Co. in your favor for six. hundred and eight dollars and fifty cents ($608.50), dated April 22, 1891, payable ninety days after date, and due July 24, 1891, we beg leave to say that we will guarantee the payment of said note at the date of its maturity. “Yours respectfully, “ F. R. Pemberton & Co.” The other allegations as to the second cause of action were similiar to those of the first cause of action. ' Defendant demurred to both causes of action for insufficiency. Motion by plaintiff for judgment on the demurrer as frivolous. J. H. Caldwell, for the motion. Frank Sullivan Smith, opposed.' See two preceding cases and note. [MAJORITY — BISCHOFF, Jr., J. Giegerich, J.] BISCHOFF, Jr., J. Defendant demurred to each of the two causes of action which are set forth in the complaint, alleging as the specific ground of the demurrer that the facts pleaded' are insufficient in law to constitute a cause of action, and in considering the demurrer we may properly assume the truth of the allegations of the complaint (Cutler v. Wright, 22 N. Y. 472 ; Milliken v. Western Union Tel. Co., 110 Id. 403). Each of the causes of action is upon a written guaranty which is alleged totidem verbis, and is void under the law of this State because the writing does not express a consideration for the guaranty (Barney v. Forbes, 118. N. Y. 580, 585 ; Drake v. Seaman, 97 Id. 230 ; Marston v. French, 17 N. Y. Supp. 509). The complaint, however, furthermore shows that the several guaranties were made in the State of Tennessee, and, because the contrary no where appears, it must be presumed that the place where the contract was entered into was intended also to be the place where it was to be performed (Perry v. Erie Transfer Co., 28 Abb. N. C. 430). In the present instance, therefore, the lex loci actus agrees with the lex loci solutionis, and they equally constitute the lex loci contractus, by which the validity of the guaranty must be determined. In the absence of proof of the statute law of another State, it will be presumed that the common law prevails therein (Whitford v. Panama R. R. Co., 23 N. Y. 465 ; Waldron v. Ritchings, 3 Daly, 288); and as at common law a guaranty was valid without any Writing whatsoever (Chitty on Contracts, 11th Am. ed., vol. 1, pp. 5, 6, 90 and 91 ; Pratt v. Hudson River R. R. Co., 21 N. Y. 305, 308), the Statute of Frauds (29 Car. II., A. D. 1677) affecting only the mode of proving it (Greenleaf on Evidence, vol. 1, sec. 262, note 6; Throop on the Validity of Verbal Agreement, sec. 8, note a; Rice on Evidence, vol. 2, sec. 515, etc.), plaintiff’s counsel contends that the guaranties are sufficient without expressing a consideration, and that the demurrer to the complaint is untenable and frivolous. The presumption, however, that the common law prevails in another State, in the absence of proof that the common law has been abrogated by the statute law of that State, is circumscribed by still another presumption, namely, that the common law of the particular State corresponds to our own (Holmes v. Broughton, 10 Wend. 75). The common law of the State of New York differed from the common law of England in that the Statute of-Frauds, passed during, the reign of King Charles II., formed a part of the former. The English colonists in this country prior to the establishment of their independence are presumed to have carried with them the laws of the country to which they at the time owed their allegiance, except only so far as such laws were inapplicable to their condition and to the form of government subsequently established by them. The laws so transmitted constituted the common law of the colonies (Bogardus v. Trinity Church, 4 Paige, 178, 198; Affd. 15 Wend. 111 ; Kent's Commentaries, vol. 1., pp. 472 and 473), and by constitutional adoption became the common law of this State (see Constitutions of the State of New York, April 20, 1777, Article XXXV., November 10, 1821, Article VII., sec. 13, November 3, 1846, Article I., sec. 17). Treating, therefore, the Statute of Frauds (29 Car. II., A. D. 1677), which may be found printed at length in Mr. Throop’s work on the Validity of Verbal Agreements, at page 21 as part of our common law, and comparing the provisions of section IV. thereof with the provisions of subdivision 2, section 2, title II., chapter VII. of the Revised Statutes as amended by Laws of 1863, ch. 464 (see R. S. Banks Bros., 7th ed., vol. III., p. 2327), no distinction is discernible between the common law and the statute law of the State of New York concerning the essential requisites of the memorandum or agreement in writing whereby one person promises to answer for the debt, default or miscarriage of another; and upon the authority of Barney v. Forbes, Drake v. Seaman, and Marston v. French, supra, the alleged guaranties upon which plaintiff seeks to recover in this action are equally invalid because they do not express a consideration under the common law and statute law of this State. It follows, therefore, that if it will be insisted that the alleged guaranties are valid and enforceable under the statute or common law of Tennessee, plaintiff must plead the law of that State in order that proof thereof may be admissible on the trial of this action (Bliss on Code Pleading, § 180). Demurrer to complaint. J. H. Caldwell, for plaintiff. Frank Sullivan Smith, for defendant. Plaintiff’s motion for judgment on the demurrer as frivolous is denied, with $10 costs. Giegerich, J. This action is upon two distinct contracts of guaranty, set forth verbatim in the complaint. The defendant demurs to each cause of action on the ground that the facts stated are insufficient, in that the written guaranties pleaded do not show any consideration as is required by the Statute of Frauds of this State (Barney v. Forbes, 118 N. Y. 580, 585, and cases cited). The plaintiff urges, that as the guaranties were given and intended to be performed in Tennessee, the law of New York State is inapplicable. But considering the question on the grounds which the demurrant himself has taken, viz., that the complaint must be tested by the Statute of Frauds as it exists in this State, the demurrer must fail. The third, fourth and seventh clauses of the complaint respectively allege that the plaintiff accepted a renewal of the promissory notes in consideration of the defendant’s agreement to guarantee the payment of the renewed notes at maturity. For the purposes of the demurrer these allegations must be taken as proved (Cutler v. Wright, 22 N. Y 472; Milliken v. Western Union Tel. Co., 110 Id. 403). True, the above clauses do not distinctly allege the consideration was expressed in writing, but it will be presumed, in a case like this, in support of a complaint on a demurrer that the contract was in writing (Marston v. Swett, 66 N. Y. 206 ; Stern v. Drinker, 2 E. D. Smith, 401, 406; Cozine v. Graham, 2 Paige, 177 ; Harris v. Knickerbacker, 5 Wend. 638 ; Livingston v. Smith, 14 How. Pr. 490 ; Abbott’s Brief on the Pleadings, § 167, p. 149). It is also true that the guaranties exhibited in the complaint are incomplete, in failing to state any consideration, but all that the statute requires is that the consideration be proved by writing (Church v. Brown, 21 N. Y. 31, 5, 332), and it may well be that letters or other writings, referring to and thereby connected with, and to be considered as part of the guaranties, will be produced on the trial, which'will abundantly show that the forbearance was granted in consideration of the guaranties (Barney v. Forbes, supra). I know of no rule which would warrant me in holding, that because a plaintiff has gone beyond what the law requires and has pleaded evidence, it shall be considered that the evidence so pleaded is all he has or can produce. Rather it should be regarded as surplusage and of no effect. As the original English Statute of Frauds which Judge Bischoff held in his-opinion in this cause [herewith reported] upon plaintiff’s motion for judgment on the demurrer as frivolous, to be properly applicable to this case, related to the method of proving a contract and not to pleading; the conclusion above reached follows with equal force, if the complaint be tested under that statute. In either case the demurrer must be overruled, with costs.