Opinion
December, 1907.
Louis H. Reynolds, for appellants.
Manice Perry, for respondent.
This action is brought to recover upon a guaranty made by the defendants to the plaintiff, as follows:
"NEW YORK, March 3, 1905.
"TRENTON IRON COMPANY, "New York City:
"GENTLEMEN. — We will guarantee C. Pagliughi's account with you for thirty days to the extent of $300. Should he default in his payments, notify us and we will see the amount is paid, and withdraw this guaranty.
"Yours very truly, "TASSI BROTHERS."
"NEW YORK, September 8 th, 1905.
"TRENTON IRON COMPANY, "New York City:
"DEAR SIRS. — Under the same conditions as before, except that the time of payment be extended to sixty days, we are willing to guarantee an account of C. Pagliughi to the extent of $500.
"Yours very truly, "TASSI BROTHERS."
Pagliughi had a running account with the plaintiff but at no time prior to April 23, 1906, was his account overdue to the extent of $500.
In the agreed statement of facts, it appears that, between the 24th day of October, 1905, and the 23rd day of April, 1906, Pagliughi repeatedly defaulted in payments due the plaintiff for purchases made by him, and that prior to April 23, 1906, no notice of any of these defaults was given to the defendants.
It is the contention of the plaintiff that, under the terms of the guaranty, it was not required to notify the defendants of any default until Pagliughi's indebtedness due and unpaid aggregated the sum of $500; and, further, that, in any event, it was incumbent upon the defendants to establish that, by reason of the failure to give such notice, they were damaged.
It is well established that the obligation of a surety cannot be extended beyond what the terms of his contract fully import. He has a right to stand upon the express terms of the contract, and cannot be held if variation is made. It is not a question whether he has been harmed by any deviation to which he has not assented. He may stand upon a technical objection and insist upon a fulfillment of the precise terms of the contract. Barnes v. Barrow, 61 N.Y. 39.
By the terms of this guaranty, it was expressly provided that the plaintiff should notify the defendants in case Pagliughi should default in his payments; to which the defendants add that, in that event, they would pay the account and withdraw the guaranty.
Notice being required by the express terms of the contract no proof of damage was necessary.
The plaintiff construes the guaranty to mean that it was required to notify the defendants of Pagliughi's defaults in his payments only when they aggregated the amount of $500. If this construction were to be placed upon it, the statement of the defendants that they would withdraw the guaranty would be surplusage since, when the defaults amounted to $500, the guaranty would be exhausted by its terms.
In the case of Powers v. Clarke, 127 N.Y. 417, the court said: "A contract of guaranty, as all the authorities agree, should receive a reasonable interpretation, according to the intent of the parties as disclosed by the writing, which, in a case of ambiguity, may be read in the light of surrounding circumstances."
Interpreting this guaranty by this rule, it seems clear that it was the duty of the plaintiff to notify the defendants when Pagliughi made his first default, in order that they might see that the account was paid and protect themselves by withdrawing the guaranty.
The judgment should be reversed and a new trial ordered, with costs to appellants to abide the event.
GILDERSLEEVE and GUY, JJ., concur.
Judgment reversed and new trial ordered, with costs to appellants to abide event.