Andrew J. Skinner, Respondent, v. Horace Valentine, impleaded, etc., Appellant

Andrew J. Skinner, Respondent, v. Horace Valentine, impleaded, etc., Appellant. (Submitted December 14, 1874; decided January 19, 1875.) One W. sold to defendant V. and wife one acre and 158 rods of land, and executed to them a written agreement to pay, when due, a mortgage thereon held by B. of $150 per acre. Plaintiff’s assignor, S., executed a guaranty, indorsed on said agreement, to the effect that W. would pay and discharge “ the within specified mortgage.” The mortgage was, in fact, for $1,459.68, having been given by W. for the purchase-price, at $150 per acre, of over nine acres of land, including that sold to defendant, and covered the whole purchase. W. had sold and conveyed, prior to the sale to defendants, all of his purchase except that so sold. The mortgage was not present when the guaranty was executed, and it did not appear that S. knew it was for a larger amount than that stated in the agreement. Held (Church, Oh. J., dissenting), that the guaranty was limited to the payment of $150 per acre on V.’s purchase. Appeal from judgment of the General Term of the Supreme Court in the third judicial department, affirming a judgment in favor of plaintiff entered upon a verdict. (Reported below, 3 N. Y. S. C. [T. & 0.], 40.) This action was brought by the plaintiff as assignee of one Calvin Skinner, to recover a balance claimed to be due by virtue of an assigment .of a bond and mortgage upon real estate, from, the said Calvin Skinner to the defendant Valentine. It appeared upon the trial that Calvin Skinner was the" owner of a bond and mortgage against one Shaw, upon which there was due the sum of $918.67, which mortgage was, in January, 1870, assigned to the defendant Valentine, having been forwarded to the defendant Thompson to deliver to Valentine, upon payment of the amount due and unpaid upon the same. The plaintiff introduced in evidence a letter from Skinner to Thompson, which accompanied the assignment, in which it was stated that the interest on the “ Walkley claim ” was to be taken out. There was no evidence that this was communicated to Valentine and no agreement that Valentine should buy the Shaw mortgage previous to the time that ho took Skinner’s assignment thereof, from the hand of Thompson. Thompson received and returned only $119, which was paid to him by Valentine, who claimed to retain the balance to satisfy the liability of said Calvin Skinner upon a' guaranty which he signed for one Walkley, which, with the instrument signed by said Walkley, was as follows : “Ho. White Creejc, March, 24¿A, 1857. “Know all men by these presents, that I, B. W. Walkley, of Ho. White Creek, county of Washington, and State of Hew York, have this day bargained and sold to Horace Valentine and Phebe, his wife, one acre and 153 rods of land, for $400 per acre, bounded as follows: North by lands of William Ashton; south by lands of Reuben McClellan ; east by lands of John S. Crocker; west by the new road, known as lands of the estate of Philip Blair, deceased; the widow Catherine Blair having and holding in her possession, during her lifetime, a mortgage of $150 per acre on the above specified land, for which I bind myself, heirs, executors and administrators, to cancel and pay when it shall become due and payable, leaving a fee simple right and title in the hands of Horace Valentine, and Phebe, his wife. “B. W. WALKLEY. [l.s.] “ For value received, I hereby guarantee and engage that the said B. W. Walkley shall pay and discharge the within specified mortgage. “OALVIH SEZNHER.” It also appeared that on the 4th day of April, 1855, the widow and heirs of Philip Blair, deceased, conveyed to Walkley, nine acres, two rods and thirty-seven perches of land, and took back a mortgage for the purchase-price at $150 per acre, i. e., for $1,459.68, to be paid one year after the death of the widow, with interest annually, payable to the widow during her natural life, according to the condition of the bond. This purchase included the land sold to Valentine; the mortgage was duly assigned to Valentine, January 30, 1866. This was the only mortgage held against Walkley; the widow was alive at the time of the trial. At the time of the conveyance to Valentine, Walkley had previously sold and conveyed all the land, except the said one acre and 153 rods. The defendant’s counsel claimed that the defendant had a right to deduct the interest on the whole of the Walkley mortgage. The court held that the case was to be governed by the letter accompanying the assignment sent to Thompson, that the guarantee was only for one acre and 153 rods at $150 per acre; that by the letter plaintiff was to pay the interest upon that amount, which was all defendant had a right to deduct, and a verdict was directed for the residue. A verdict was rendered accordingly. M. Fairchild for the appellant. The mortgage described in the agreement is the one of $1,459.68. (Booth v. F. and M. Bk., 50 N. Y., 401; Cook v. Litchfield, 9 id., 287-289.) Courts in construing contracts are governed somewhat by the existing circumstances. (Woodruff v. Woodruff,, 52 N. Y., 53-57; St. Luke v. Ass’n, id., 191-200 ; Springsteen v. Samson, 32 id., 703 ; Blossom v. Griffin, 13 id., 571: Gales v. Magee, 3 id., 232; Bancroft v. Winespear, 44 Barb., 211; Crest v. Burlingame, 62 id., 351; 2 Kent’s Com., 554-557.) The construction of the words of the contract should be more favorable to the promisee than to the promisor. (Fell on Guar., 145; Douglass v. Reynolds, 7 Pet., 122; Mason v. Pritchard, 12 East, 227 ; Lamb v. Barker, 3 Whart., 148 ; Miller v. Stewart, 9 id., 702 ; Walrath v. Thompson, 4 Hill, 200.) The law, if necessary, would control the literal terms of the contract and cause the plain intent to prevail over the strict letter. (2 Kent’s Com., 554-557; 2 Bl. Com., 379, 4.) The rule of construction. ' h D. M. Porter and L. A. Gould for the respondent. The language of the guarantee is so plain that no evidence of intent can be required or allowed. (Dobbin v. Bradley, 17 Wend., 422; Walrath v. Thompson, 6 Hill, 540; Leeds v. Dunn, 10 N. Y., 469; Henderson v. Marvin, 11 Abb., 142; Callender v. Dinsmore, 55 N. Y., 200; Moore v. Hitchcock, 4 Wend., 292; Paige v. Cogwin, 7 Hill, 361.) As the event which fixes the liability of the principal is uncertain, there should have been a demand on the principal in order ’ to charge the surety. (Morris v. Wadsworth, 11 Wend., 101.) [MAJORITY — Rapallo, J.] Rapallo, J. The agreement of Walkley, which the plaintiffs assignor, Calvin Skinner, guaranteed, recited that the one acre and 153 rods of land, sold by Walkley .to Valentine and his wife, were subject to a mortgage of $150 per acre, which Walkley bound himself to cancel and pay when due and payable, leaving a fee simple title in Valentine and his wife. Calvin Skinner guaranteed that Walkley should pay and discharge such mortgage. When this guarantee was executed the mortgage was not present, nor does .it appear that Calvin Skinner knew that it was for any larger amount than $150 per acre on one acre and 153 rods of land. In fact it was a mortgage of $1,459.68, covering upward of nine acres of land, of which the one acre and 153 rods sold to Valentine were a part, and it amounted to just $150 per acre on the nine acres and upward. All the residue of this tract had been sold before the sale to Valentine, and unless upon such prior sales the purchasers had assumed the payment of their respective proportionate parts of the mortgage, they would have the right to insist, in case of a foreclosure, that the lands be sold in the inverse order of alienation, the result of which would be to subject Valentine’s land to be first sold. Valentine claims that the purpose of Walkley’s agreement and Skinner’s guarantee was to clear his land of the incumbrance of the mortgage, and that this could only be accomplished by paying the entire mortgage. But it did not appear upon the trial what arrangements had been made with the prior purchasers in respect to the mortgage, nor that Calvin Skinner, the guarantor, had notice that Valentine’s land was subject to any incumbrance beyond $150 per acre, nor that it was in fact subject to any greater lien. We think the Supreme Court correctly construed the guarantee, as limited to the payment of $150 per acre on Valentine’s purchase. This leads to an affirmance of the judgment. Valentine, by accepting the assignment, of the Shaw mortgage accepted Skinner’s proposition that he should cash it, deducting the amount of the “ Walkley claim” (as it was called between them). This claim, amounting only to about $149 of interest then due, instead of the sum of $798.68, which was retained, the plaintiff, as assignee of Calvin Skinner, was entitled to a verdict for the difference. We have considered the argument on the part of the appellant in which he contends that the agreement of Walkley sufficiently describes the Blair mortgage. The answer to this argument is, that from a reading of the instrument itself, without knowledge of the extrinsic facts, it would be impossible to know that there was any such mortgage, or any lien on Valentine’s land exceeding $150 per acre; that Calvin Skinner, the guarantor, is not shown to have had any knowledge of those extrinsic facts, and cannot therefore be deemed to have contracted with reference to them. There is nothin» on the face of the instrument to show that the mortgage covered any except the one acre and 153 rods sold to Valentine. The judgment should be affirmed with costs. All concur, except Chuboh, Ch. J., dissenting. Judgment affirmed.