Hazeltinte v. Larco (1857) · DecisionDepot

Hazeltinte v. Larco

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Jul 1, 1857Published

Before: Burnett

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Holding. A guaranty endorsed on a charter party at the time of its execution is valid under the Statute of Frauds because the reference to the "within charter" incorporates the consideration expressed therein into the guaranty.

Issues

Whether a guaranty is void under the Statute of Frauds for failing to express consideration when it is executed simultaneously with the underlying contract.
Whether a guaranty that references the underlying contract satisfies the requirement that the consideration be in writing.

Disposition. affirmed

Quotations verified verbatim against the opinion

“In this case Larco refers to the “ within charter,” and by that reference he makes the “within charter” a part of his guaranty for all purposes not expressed in the guaranty itself.”

Synopsis

A guaranty endorsed on a charter party at the same time with its execution, and the consideration of one being in fact the consideration of the other, and being in these words: “ I hereby guarantee the fullfilment of the within charter on the part of the charterer ”—is good.

The instrument referred to in the guaranty becomes part thereof. If the guaranty were executed subsequently, it would fail, for there is either no consideration for the promise, in fact, or the new consideration is not expressed in the instrument referred to.

Burnett, J. delivered the opinion of the Court—Murray, C. J., concurring.

The plaintiff, as master of the bark Acadia, entered into a charter party with one Nicholas Dabovich, on the twenty-seventh day of October,1855, and on the back of the same instrument the defendant, Larco, endorsed this guaranty:

“I, N. Larco, hereby guaranty the fullfilment of the within charter on the part of the charterer.

“Nicolas Larco.”

It is conceded that the guaranty was made at the same time with the charter party, and that the consideration of the one was in fact the consideration of the other. The defendant, how[34]ever, insists that the guaranty is void, because the consideration is not expressed in .the guaranty itself.

The twelfth section of the Statute of Frauds, provides, that every special promise to answer for the debt, default, or miscarriage of another, shall be void, unless such agreement, or some note, or memorandum thereof, expressing the consideration, be in writing, and subscribed by the party charged therewith. The statute of New York is like our own, and the counsel of defendant has referred to the case of Hall v. Forman, 5 Denio, 484, to sustain the ground taken by him. That is certainly a case ably considered; and while the facts of the case are different in the most substantial respects from the case under consideration, it must be conceded that the doctrine deliberately laid down in that case by the Supreme Court of that state, clearly supports the position assumed by counsel. But it is equally apparent that different decisions upon the same points have been made, as in Manrow v. Durham, 3 Hill, 584, and Legget v. Raymond, 6 Hill, 639. The New York authorities upon the point are conflicting, and Justice Bronson, who dissented from the opinion of the Court, says :

“ When, at the time a note is. made, and as a part of the same transaction, a third person endorses an absolute guaranty upon the note, he will be liable in same form for the payment of the money. Both instruments taken together make but one contract, and the contract which upholds the one will support the other.” 3 Hill, 589.

The case of Tewskbury v. McEvoy, decided at the July Term, 1855, of this court, is a case precisely in point. There the party attached these words underneath a lease :

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In New York, those judges who have held such undertakings valid under their statute, have differed as to the ground upon which they base their opinions. Some have considered the undertaking as a note; but it has been well said that such an instrument does not fill the definition given of a promissory note by any writer upon the subject. The true ground upon which the decision should rest, would seem to be this: that the note and the guaranty are but parts of the same instrument, the note expressing that which first applies to the maker, and the guaranty expressing that which applies only to the guarantor, while the note and guaranty, taken together, make up the contract as between the payee and the guarantor. It would seem competent for parties to refer to any writing for a given purpose, and [35]that writing for that purpose becomes a part of the instrument signed by the party to be charged; and it does not matter in what place or in what order the parties sign their names, the intention must govern. In this case Larco refers to the “ within charter,” and by that reference he makes the “within charter” a part of his guaranty for all purposes not expressed in the guaranty itself. Had he executed the charter party without the guaranty, he would have have been primarily liable, and therefore it was necessary to sign the guaranty, to show that his liability was secondary. The only purpose of this guaranty was to specify the character of his liability ■, and as to the acts he guarantied to be done, and the consideration for them, namely, the acts to be performed on the part of the plaintiff, he refers to the “within charter.” This was convenient and sensible, and the intention of the parties would seem to be clear. Where the guaranty is endorsed upon the instrument after it is made, and therefore constituted no part of the original instrument, the guaranty will fail, for the reason that there is either no consideration for the promise in fact, or the new consideration is not expressed in the instrument to which reference is made.

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