Bailey Loan Co. v. Seward

Citations

• 9 S.D. 326
• 69 N.W. 58
• 1896 S.D. LEXIS 172

Syllabus

<p>1. The chapters on 'guaranty (Comp. Laws, §§ 4293-4296) and suretyship (§§ 4297-4320) are to be construed in the light of the distinction that a surety “enters into the contract primarily for the benefit of the debtor” while with the guarantor “the benefit of the principal debtor is no part of the inducement to him to contract”; since the commissioners, in preparing the Civil Code for New York (which was never adopted in that state), made such distinction in their notes to Sec. 1558 thereof, defining a surety, of which Comp. Laws, Sec. 4297, is a copy; and it will be presumed that the provisions of the proposed New York code adopted in the Dakota code were adopted as construed by the commissioners of that state.</p> <p>2. A complaint alleged execution to plaintiff of a note by one of the defendants; that at and before delivery thereof it was indorsed, and payment thereof “guarantied” by the other defendants on the back of the note as follows: “For value received, we hereby waive protest on the within note, and we hereby guaranty payment of same.” Held, that though the answers of such indorsers admitted the allegations of the complaint, and set up as a defense failure of plaintiff to comply with their demand that lie proceed against the maker of the note and the stock pledged by him to plaintiff as security, and though such defense is not available for a guarantor, but only for a surety, it was not error to refuse direction of a verdict for plaintiff against defendant indorsers, asked for on the ground that they were guarantors, and not sureties; it being apparently conceded that they made their contract to give credit to the maker of the note, and not for any benefit to themselves, and they being in the case merely sureties. Fuller, J., dissenting, on the ground that the answer admitted that they were guarantors, and that the case was tried below and argued on appeal on the theory that they were guarantors.</p> <p>3. Under Comp. Laws, Sec. 4305, providing that “a