
    Nathaniel Sturges and Another versus Edward H. Robbins.
    
      A subscribed a memorandum of the following tenor, viz. “ The subscriber hereby engages to Messrs. B and C, that if they wül credit D a sum not exceeding 500 dollars, in case he shall not pay the same in 12 months from this date, I will pay the same myselfin consequence whereof, B and Csold goods to D, to the value of 500 dollars, taking his promissory note for that sum. Immediately after, B and C sold D other goods, for which he gave another note for 375 debars. Within the year, D paid 200 dollars, which was endorsed on the last-mentioned note, and, in three months after the year expired, he paid the balance of that note, and it was cancelled. Soon afterwards, B and C sold other goods to D, taking his promissory note for 379 dollars for the same 'without any guaranty. 200 dollars were paid on this last note, the balance thereof, and the whole of the note for 500 dollars remaining unpaid. In an action by B and C against A, upon the memorandum aforesaid, it was held that A was answerable for the 500 dollars, and interest from the expiration of the year ; due notice having been given him, that the debt which he had guarantied was unpaid, and the same having been demanded of him.
    This was an action of assumpsit, founded on a writing, signed by the defendant in the words following, viz. “ The subscriber hereby engages to Messrs. Sturges and Parfcman, that if they will credit Elijah Davis, of Bath, a sum not exceeding five hundred dollars, in case he shall not pay the same in twelve months from this date, I will pay the same myself. October 8th, 1804.”
    The action was submitted to the opinion of the Court, on a case stated by the parties, from which it appears that, in consequence of the said engagement, the plaintiffs immediately after sold and delivered to Davis merchandise to the value of 500 dollars, and took from him a promissory note for that sum, dated October 10th, 1804, payable on demand, with interest, after six months from the date. Immediately after the selection of the said merchandise, the plaintiffs sold and delivered to the said Davis sundry other goods, to the value of 375 dollars, for which they took his promis- [ * 302 ] spry note of the same date, payable in six months, * without any guaranty. In the course of the year 1805, the plaintiffs received of Davis, by several instalments, the amount of the last-mentioned note, which was cancelled and delivered up to him on the 14 th of December, 1805; at which time, the sum of 111 dollars 58 cents, the balance of that note, together with the interest thereon, was paid ; the two first payments thereon, amounting to 200 dollars, having been made within a year from the date of the writing signed by the defendant. On the 14th of October, 1805, notice was given by the plaintiffs to the defendant, that no part of the sum, for which he had undertaken, was paid by Davis; and payment was demanded of the defendant. On the 17th of December, 1805, the plaintiffs credited the said Davis with other merchandise, to the value of 379 dollars 63 cents, for which he gave his note, without any other security, payable in six months and on the 26th of November, 1806, he paid 200 dollars on ac count thereof, the residue of the last-mentioned note, and the whole of the first note for 500 dollars, being still due.
    Upon these facts, the questions submitted to the Court were, whether the defendant is liable, and, if liable, whether the payments aforesaid, or any part thereof, ought to be applied towards the discharge of his said contract. If the plaintiffs are entitled to recover, the defendant agreed to be defaulted, and that judgment should be rendered against him, for such sum as the Court should award, with costs. If otherwise, the plaintiffs agreed to become nonsuit, and the defendant was to recover his costs.
    
      Thatcher, for the defendant,
    insisted that the several sums, paid by Davis to the plaintiffs, ought, in good faith, to have been applied in discharge of his first note.
    The guaranty of the defendant was on an implied condition, that the plaintiffs should not give credit to Davis for more than 500 dollars. He had a right to annex this condition to his guaranty, whether it was dictated by prudence, or mere caprice ; and the plaintiffs, having accepted it with the condition, were ( * 303 ] bound by it. But there were reasons * for the condition. The plaintiffs, by giving a credit for other goods, and for a shorter term, were able to apply the proceeds of the credit, for which the defendant was guaranty, in payment of the second credit, while they still held the defendant answerable. Whether, in fact, any injury resulted to the defendant or not, is not material. The plaintiffs did not conform to the condition, and they have lost the benefit of the defendant’s security.
    
      Jackson, for the plaintiffs,
    contended, that the defendant’s engagement ought to receive a liberal construction, as a transaction between merchants, who could never have understood it as containing a condition, any further than as it contained a limitation of the amount for which the defendant was willing to become surely for his friend. The guaranty increased the confidence of the plaintiffs in Davis’s solvency, and induced them to give him a further credit. The same effect would have followed, had the guaranty been addressed to other merchants, and shown to the plaintiffs. It was to be presumed, that the defendant held property of Davis, or was indebted to him to the amount, for which he offered to become surety. The guaranty being for a year, it would have been showing a doubt of the defendant’s sufficiency, to have applied the moneys received during the year to the first note ; but, at any rate, Davis, who paid the moneys, had a right to appropriate them to which of the notes he pleased. As to the payments made before the year expired, it was the duty of the plaintiffs, independent of Davis’s election, to appropriate them to the note which had expired.
    The defendant having had reasonable notice of Davis’s negligence, it became his duty to take measures that the note was paid by Davis. He took no such measures for years. It then behaved the plaintiffs to be diligent for themselves, and to collect what money they could from Davis, and appropriate it in discharge of their other demands against him.
   * The opinion of the Court (absente Parsons, C. J.) [ * 304 ] was delivered by

Parker, J.

On the facts agreed in this case, the question submitted to us is, whether the defendant is liable for the whole, or any part of the sum mentioned in the writing, on which the action is founded.

The counsel for the defendant has contended, that the writing signed by the defendant contained a conditional engagement only, and that the condition is of a nature to avoid the contract, if not strictly complied with by the plaintiffs; the true construction of the writing being, that the defendant would be answerable, if the plaintiffs did not trust Davis more than five hundred dollars; but that if they exceeded that sum, he was not to be liable.

We cannot adopt this construction, being satisfied that the words, which are supposed to amount to a condition, were intended by the defendant only to limit his responsibility to the sum of five hundred dollars; there being no reason why he should be unwilling that Davis should obtain further credit upon his own responsibility — a circumstance which would diminish, rather than increase, the defendant’s eventual liability to pay the money.

But the defendant’s counsel has more strenuously urged, that the plaintiffs, having voluntarily given Davis a credit beyond the sum, for which the defendant became responsible, and having received payments of Davis within the term of credit given, pursuant to his guaranty, those payments ought to have been applied to reduce the credit given, in consequence of the defendant’s engagement, instead of having been applied in payment of the note, which he had not undertaken to guaranty,

This argument appeared plausible, and had some weight with some of the Court at the hearing; but, upon deliberation, we are all of opinion that it has no solidity. The plaintiffs were not restricted, by any engagement with the defendant; from crediting Davis beyond the sum for which they had obtained the [ * 305 ] defendant’s guaranty. Finding that * he had obtained that guaranty for five hundred dollars, they might reasonably suppose there would be no hazard in trusting him with a less sum ; and they had a right to give such term of credit as they saw fit. This could not prejudice the defendant; for property was put into Davis's hands equal to the note taken of him, and, as far as this increase of capital would be of service to him in extending his business, so far would his ability to pay his debts probably increase.

Now, from the terms of the writing signed by the defendant, connected with the tenor of the note for five hundred dollars, and the common practice among merchants to take their notes payable on demand, notwithstanding a credit is intended and understood between the parties; it may reasonably be presumed, that the credit, which was founded on the defendant’s guaranty, was twelve months from the date of that guaranty; and that, according to the true contract of the parties, Davis was not to be compelled to pay at an earlier day, unless insolvency was likely to happen. When, therefore, he paid to the plaintiffs two sums of money in the summer of 1805, he had a right to direct the application of them to the discharge, fro tanto, of his note for three hundred and seventy-five dollars, that note being then due, and the note for five hundred dollars not being then due, according to the understanding of the parties; and it ought to be presumed that he did so direct If, however, he did not, the plaintiffs had a right, if they were not bound, to apply those payments to the note which was due, instead of applying them to that, the payment of which could not, in conscience, be then enforced.

As to the payments, which were made after the expiration of the first credit, it is to be observed, that these were made after notice to the defendant that he was absolutely bound, in consequence of the non-payment of Davis, and after demand on the defendant for the fulfilment of his guaranty. The plaintiffs, being the fair creditors of Davis, * without any security, had an [ *306 ] undoubted right to apply these payments as they saw fit; having given the defendant an opportunity, by their notice to him, of securing himself against any eventual loss. And it is clear, that the plaintiffs had no view of prejudicing the defendant; for they would not have trusted Davis so late as the 17th of December, 1805, without any security, had they entertained any doubts of his solvency.

For these reasons, we are all of opinion, that the plaintiffs have maintained their action for the whole sum guarantied by the defendant ; for which, together with interest from the 8th of October, 1805, judgment must be rendered after a default of the defendant

Defendant defaulted. 
      
       [Quære, if this be not the correct view of the case. The terms of the engagement seem to have been conditional; and there was nothing to indicate an intention to make a continuing guaranty. — See Melville & Al. vs. Hayden, 3 Barn, & Ald 593. — Boxill vs. Turner, 2 Chitty, 205. — Nichols vs. Paget, 1 Cromp. & Mees. 48. - 3 C. & P. 395. — 3 Tyr. 164. — Kirby & Al. vs. The Duke of Marlborough & Al. 2 M & S. 18. — Hassell & Al. vs. Long, 2 M. & S. 362. — Ed.)
     
      See the case of Mason vs. Pritchard, 12 East. 227. [This was a very different case. See Melville vs. Hayden, 3 B. & A. 595.— Ed.]
     