Opinion
Argued October 12, 1888
Decided November 27, 1888
J. Frederic Kernochan for appellant.
Sidney V. Lowell for respondents.
We think the judgment below proceeds upon a misconstruing of the contract of guaranty. The guaranty did not, in terms, purport to bind the executors or administrators of De Mill Co. But it is a presumption of law, in the absence of express words, that the parties to a contract intend to bind not only themselves, but their personal representatives. (1 Pars. on Con. 530, and cases cited; Co. on Lit. 209 a.) In case of a contract for the payment of money, or the sale or purchase of property, or of a covenant of warranty, it would be an unreasonable supposition that the parties intended that the obligation should not survive against their representatives, although not specially named. It is, of course, competent for parties to agree that a contract shall not survive and that all obligation under it should terminate on their death. So a contract may be of such a nature as to admit only of a personal performance, or as to imply that it is to be operative only during the continuance of personal relations, although not so expressed in terms, and will be deemed dissolved by death or other disability which renders performance, according to the intention, impossible. Contracts for the rendition of personal or professional services are of this character, and they terminate with the death or disability of the party owing them.
The guaranty in this case has no such personal quality. It was given by De Mill Co. as an inducement to the plaintiff's testator to purchase from them forty shares of the stock of "The Albemarle Swamp Land Company." They represented the stock to be valuable, and claimed to be selling it for some parties who held it, and who desired to realize upon it, but whose names were not disclosed. They guaranteed that the plaintiff, so long as he held the stock, should receive dividends thereon equal to seven per cent per annum, and that they would make good any deficiency. The contract is plain and unambiguous. The obligation of De Mill Co. was not limited in terms to the duration of the partnership or to the lives of the copartners. The only limitation of time was the period during which the purchaser should hold the stock. The guaranty protected the purchaser while his interest should continue, and this presumably was what he required and both parties intended. Any other construction would subject the purchaser to the risk of losing the benefit of the guaranty on the death of the guarantors, which might happen at any time. There are cases cited holding that a continuing guaranty of advances to be made to a third party, in the absence of any express provision, is revoked as to subsequent advances by the death of the guarantor and notice. ( Coulthart v. Clementson, L.R., 5 Q.B.D. 42; Harriss v. Fawcett, L.R., 15 Eq. Cas. 311.) These cases stand upon a perfectly equitable principle, each advance constituting a fresh consideration. But a guaranty creating a continuing pecuniary obligation, the consideration for which is entire and given once for all, is very different, and it would be very inequitable to hold that it was terminated by the death of the guarantor, unless this intention is plainly expressed in the guaranty itself. ( Lloyd's v. Harper, L.R., 16 Ch. Div. 290.)
The judgment in this case cannot, therefore, we think be supported on the theory that the guaranty, by fair intendment, was limited to the lives of the guarantors. Equally unfounded, we think, is the claim of the defendants that De Mill Co. were sureties, and for that reason their obligation terminated on their death. ( Getty v. Binsse, 49 N.Y. 385.) Their undertaking was original and not collateral. They entered into the guaranty for their own benefit, upon a consideration moving to them as principals. If they were in fact, acting as agents in selling this stock, not having disclosed their principal, they stood in respect to the purchaser as the owner and vendor. ( Cobb v. Knapp, 71 N.Y. 348.) In entering into the guaranty they assumed no obligation resting on the company. The company was under no legal obligation to declare dividends to stockholders, and, least of all, to declare dividends of any particular amount. The contract of De Mill Co. was clearly original, and they were principals and not sureties.
We think the judgment should be reversed and a new trial granted.
All concur.
Judgment reversed.