Opinion
Argued May 9
Decided September 13, 1871
Nelson Smith, for the appellant.
Samuel Hand, for the respondent.
The case of Hamilton v. Van Rensselaer (43 N.Y.R., 244), is decisive of the present case. There Van Rensselaer, as security for Waddington, guaranteed the payment of the interest of the bond given by Waddington to Hamilton. The bond was dated in July, 1854, and payable in January, 1861, with semi-annual interest. The guaranty was in the words following: "For value received, I guarantee the punctual payment of the interest on the within bond, and will pay the interest on demand, in default of its payment by Mr. Waddington." The question upon this guaranty came before the Court of Appeals in January, 1870. The judges of that court were divided in opinion upon the construction to be given to this guaranty. Upon a subsequent argument in the new Court of Appeals, it was held that the guarantor was liable only for the interest accruing prior to the maturity of the bond. This decision was based upon the proposition, that such was the intent and meaning of the parties, to be derived from the language of the instrument. The guaranty before us is more precise and specific, than that of Van Rensselaer. He guarantied the punctual payment by Waddington of the interest on the bond, and agreed to pay it, on demand, in default of its payment by Waddington. Here, Knox guaranties the payment of the interest within ten days after the days on which the same shall become payable. The reference to the days on which it becomes payable, is to the days before the maturity, the 31st day of January, and the 31st day of July, in each succeeding year, until January, 1860. After its maturity, the interest unpaid, as well as the principal, is payable not on particular days, but whenever the creditor chooses to require it. The principle of the case referred to must dispose of the one before us.
The appellant seeks to distinguish the cases, by the suggestion that, in the case cited, the guarantor was a mere surety for the debt of the mortgagor, while in this case, the guaranty was made in payment of the respondent's own debt. This argument is not sound. There is no statement by the referee, nor any thing to indicate, that the payment of $4,000 of the purchase-money was not originally agreed to be made by the transfer of this mortgage with a limited guaranty. The conveyance was made to Knox, by Peter Melick, on the 13th of July, 1857. On the same day the mortgage was transferred and the guaranty executed. The referee finds, "that the consideration of said assignment and guaranty was $4,000 of the purchase-price of the house and lot so sold and conveyed to said defendant, Knox." In other words, Melick agrees to sell the house and lot to Knox, and to receive payment of $4,000 of the purchase-money by the assignment of this mortgage, with a guaranty of the payment of the interest upon the same. If this be so, there was no personal debt of Knox for this sum of $4,000. That amount was to be paid by the transfer of a specific obligation of another person. The same contract which created an obligation for $6,700, provided that, for $4,000 of the amount, Knox should be under no personal liability, except so far as a liability was created by his guaranty.
The case of Hamilton v. Van Rensselaer does not decide that the interest to be collected upon a bond, after maturity, is not interest as such; that it is damages for the non-payment of the principal. The suggestion to that effect is that of the learned chief judge as a suggestion not in the case. While it will carry the weight which his position and his learning will give to all his opinions, it remains but an individual opinion, not a decision of the court. Indeed, he expressly disclaims the determination of that point.
The judgment should be affirmed with costs.
All concur. Judgment affirmed with costs.