Appeal from Special Term, Albany County.
Action by Willis A. Winne against Solomon Mehrbach. Judgment for plaintiff, and defendant appeals. Modified and affirmed.
Jellenik & Stern (Nathan D. Stern, of counsel), for appellant.
Ward & Cameron (Walter E. Ward, of counsel), for respondent.
Argued before SMITH, P. J., and CHESTER, KELLOGG, COCHRANE, and SEWELL, JJ.
SMITH, P. J.
The action is brought to recover upon the defendant's guaranty of certain accounts between the plaintiff and the Cooperative Ice Company, of which the defendant was the president. The guaranty is in form as follows:
" Sept. 8, '03.
" I hereby guarantee and agree to make good the accounts between W. A. Winne and the Co-operative Ice Company for ice whatever the company will be short. " S. Mehrbach."
It appears in the case that at the time this guaranty was given the plaintiff was furnishing ice to the Co-operative Ice Company; that for the ice already furnished the Co-operative Ice Company was owing the plaintiff the sum of $3,134.87; that at that time the defendant was under an oral promise to guarantee accounts that the ice company should run with the plaintiff. It further appears that after the signing and delivery of this guaranty the plaintiff continued to furnish [114 N.Y.S. 619] ice to the Co-operative Ice Company to the amount of $7,192.81. Thereafter the Co-operative Ice Company went into bankruptcy. At the request of the defendant the plaintiff's claim was filed with the trustee in bankruptcy, and the judgment represents the whole amount due, after allowing for the dividend received from the trustee in bankruptcy.
The sole defense rests upon the statute of frauds. We cannot agree with the learned referee that this writing can in any event be construed to be an original contract. Whatever may have been the interest of the defendant as a stockholder in the Co-operative Ice Company, he was not individually liable for its debts. His assumption of liability by the contract in question was only of a collateral liability as surety for the nonpayment by the ice company. The contract, therefore, was clearly one contemplated by the statute of frauds, and unless it meets the requirements of that statute the defendant must prevail in this action.
The authorities all agree that the writing must express the whole contract. The consideration of the contract must be either expressed or fairly inferred therefrom. In Seymour v. Warren, 179 N.Y. 3, 71 N.E. 261, the rule is thus stated:
" No particular form of words is necessary to be used for expressing the consideration. It is enough if from the whole instrument the consideration appears in express terms, or by fair and necessary inference. As a general rule the statute is satisfied when the memorandum shows with reasonable clearness that the defendant's promise is designed to procure something to be done, forborne, or permitted by the party to whom it is made, either to or for the promisor or a third party. (Citing authorities.) Where the language of the instrument is such as to warrant the inference that the consideration rests upon mutual promises, the writing satisfies all the requirements of the statute."
Upon page 5 of 179 N. Y., and page 261 of 71 N. E., the opinion further reads:
" The terms of the written instrument are to be construed and understood in the light of all the surrounding circumstances. Waldron v. Willard, 17 N.Y. 468.When the situation of the parties is understood in this case, and the subject-matter of the transaction is considered, it is not difficult to draw the inference from the paper to the effect that the owner consented that the defendant should collect the rents of the property and apply them in the manner stipulated on their part. There is no better way to ascertain the meaning and construction of a written instrument than to look at the acts and conduct of the ...