Williamson v. Chiles, 27 N.C. 244, 5 Ired. 244 (1844)

Dec. 1844 · Supreme Court of North Carolina

27 N.C. 244, 5 Ired. 244

GEORGE WILLIAMSON & AL. vs. WILLIAM CHILES.

A. B. and C. agreed on the 11th of January, 1842, to indemnify D. and E. for advances made by the latter to F. during the year 1842, each (including D, and E.) to be responsible for a sum not exceeding five hundred dollars each. On the 6th of January, 1843, the said parties, together with G., the defendant, covenanted “ to continue their responsibility for F. for and during the year 1843, upon the same terms and for the same purposes as set forth in the foregoing covenant for the year 1842,” with the same limitation as to the responsibility of the parties] to five hundred. One of the parties proved to be insolvent.

Held by the pourt, that the defendant G. ^yas only responsible for advances made in the year 1843.

Secondly, that neither of the guarantors was responsible for more than five hundred dollars in either of the years-^-and that it was a several contract so that none were responsible for the share to be contributed by one, who proved insolvent,

Appeal from the Superior Court of Law of Caswell County, at the Fall Tevui, 1844, his Honor Judge Pearson presiding.

This was an action of covenant, in which the following case agreed was submitted to the court. On the 11th day of January, 1842, certain persons, of whom the defendant was not one, entered into the following covenant, viz:

“ This agreement witnesseth, that whereas, we, the undersigned, together with George Williamson, Hiram Henderson, and Nathaniel M. Roane,” (who are the plaintiffs in this suit,) “are desirous of lending pur assistance and encouragement to Mr. Wyatt Walker, coachn/aker in Yanceyville, to enable him to sustain himself and carry on his business of coach making in the said town of Yanceyville, and to this end we have entered into an arrangement with the said Williamson, Henderson and Roane, by the terms of which arrangement the said Williamson, Henderson and Roane have undertaken and agreed to become endorsers for the said Wyatt Walker, to enable him to raise funds to carry on his conch making business in the town of Yancey vil le, for the year 1842; and we, the undersigned, have on our part agreed to indemnify the said Williamson, Henderson and Roane, on account of the liability which they have agreed to assume as aforesaid, to the extent herein set forth, viz: the said Williamson, Henderson and Roane have agreed to lend their names as endorsers to the said Walker, at any time when he may desire it, during the year 1842, to enable him to raise funds to carry on his said business; and we bind ourselves, in the event the said Williamson, Henderson and Roan should sustain loss, by reason of their liability aforesaid, to bear each of us in equal proportions with the said Williamson, Henderson and Roane, any loss, which they may thus sustain; provided, neverthelesss and it is hereby expressly understood and agreed, by and between all parties concerned in this agreement, that we the undersigned, are not to be held responsible to an amount exceeding five hundred dollars each. In testimony whereof, &c.” Dated 11th of January, 1842, and signed and sealed by the parties. On the 6th day of January, 1843, the defendant, with the same parties, executed the following covenant, viz:

“ We, the undersigned, covenant to continue their responsibility for Mr. Wyatt Walker, for and during the year 1843, upon the same terms and for the same purposes, as set forth in the foregoing covenant for the year 1842; but it is understood by all parties concerned, that Messrs. Williamson, Henderson andRoaneare only in anyevent to be responsible to the amount of five hundred dollars each, and the parties, whose names are undersigned, are to be responsible only to the amount of five hundred dollars each.” (Signed and sealed by the defendant, and the other parties.) The plaintiffs endorsed for Walker in the year 1842, to the amount of $2329 07, and in the year 1843, to the amount of $3435 77; and Walker failed in business, and is completely insolvent, so that the plaintiffs have had to pay the whole amount for which they became responsible as endorsers. A statement was exhibited, shewing the amount of their liability and the amount paid, including interest for each year. After the failure of Walker, Henry Wil-]is, one of the covenantors, also failed and became insolvent, the plaintiffs used due diligence to collect from him the amount of his liability, but failed to collect any thing.

If the defendant is liable for his rateable part of the responsibilities of the plaintiffs, incurred in 1842, and not renewed in 1843, and also liable for his rateable part, on account of Willis’ failure, then judgment is to be entered up against him for the sum of $615 79. If the defendant is liable for the responsibilities of the plaintiffs, incurred in 1842, and not renewed in 1843, and not liable for any part of the loss by Willis’ failure, then judgment is to be entered for the sum of $559 82. If the defendant be only responsible for his rateable part of the responsibilities of the plaintiffs, incurred by actual endorsements in 1843, and not responsible for any part of Willis’ failure, then judgment to be entered for $312; and if his rateable part of the loss by "Willis is to be added to his part of the liability for 1843, then judgment to be entered for the sum of $355 05. Judgment to be entered against the defendant according to the opinion of the court upon the facts stated. But it is agreed that the defendant has already paid the plaintiffs the sum of $100; so that that sum is to be deducted from the amount for which he may be held to be liable.

The court was of opinion that the defendant was liable for the responsibilities of the plaintiffs, incurred by reason of their endorsements for Walker, as well in the year 1842, as in the year 1843, although the endorsements made, and responsibilities incurred by them in 1842, were in no way renewed in 1843 — the creditors forbearing to collect their claims, by reason of the old endorsements, until sometime in or after the year 1843. But the court held the defendant’s liability to be limited to $500. The court also held, that the defendant was liable for his rateable part of the loss by Willis’ failure; so that judgment was directed to be entered up for the sum of $572, which sum is made up of the $500, and the defendant’s share of the loss by Willis, including interest on both sums — ■ this amount to be subject to a deduction for the $100, paid by the defendant to the plaintiffs, leaving the amount of the judgment to be entered $472.

From this judgment the defendant appealed.

Morehead and Norwood for the plaintiffs.

E. G. Reade and Iredell for the defendant.

Ruffin, C. J.

The court is of opinion, that the' defendant is bound for the endorsements of the year 1843 only. The terms of the agreement, as it seems to us, expressly confine it to that period: being that the parties “ covenant to continue their responsibilities for Wyatt Walker, for, and during the year 1843.” The instrument adds, indeed, that this responsibility was “ on the same terms, and for the same purposes, as set forth in the foregoing covenant for the year 1842.” This is not an adoption by the parties to the second agreement of the engagements of the first. It is apparent, that both instruments were written on the same paperand the object of naming the prior in the latter was not to transfer the obligations of the one into the other, but merely by a reference to its terms for 1842, to give the terms of the agreement for 1843, without taking the trouble to write them in extenso in the same words with the former — saving only, the change of the year from 1842 to 1843.

The counsel for the plaintiff relied on the words, “ continue their responsibilities,” as deuoting an intention in the parties to the second agreement, to assume all the liabilities of both years. But we do not perceive the fofce of the argument; and, certainly, not that there is enough in it to do away with the express restriction to 1843. The paper was probably so written, when it was expected it would be executed by the same persons only, who gave the first. But even as to them, it could only mean that they would “ again bind ” themselves for endorsements to be made in 1843, as they “ had been bound ” for those that had been in 1842, by the instrument referred to in and annexed to the new agreement. It could not mean, that they should thereby assume the liability for the transactions of 1842; because they were already fully bound therefor by the agreement of 1842. Still less could that word “continué” apply to the present defendant, in the sense insisted on by the plaintiff; for, not being a party to the agreement of 1842, he cou^ not continue to undertake the engagements made in it by others. In fine, whatever may have been the actual intention of the parties, the two instruments, as framed, relate to different subjects and different years. He, who executed but one, bound himself for but one sum of $500, while each persom who executed both, bound himself to the extent of two sums of $500, namely, one for each of the years 1842 and 1843.

It is further stated, that Henry Willis, who is one of the covenantors in each instrument; has not paid any part of his proportion of the loss for either year, and is insolvent; and another question is, whether the defendant is liable for a rateable share of Willis’ aliquot part. We think not. As to his deficit for 1842, that is already disposed of in the first point. And for that of 1S43, the defendant is not bound, because this is not a joint undertaking by the covenantors, as the sureties for Walker or for each other, but it is an undertaking by each one, for himself, to pay to the plaintiffs his aliquot part of the loss that should arise to the plaintiffs by putting their names on Walker’s paper — limiting his liability, however, to the sum of $500, The insolvency of Willis can make no difference, for this is an action on the covenant, and that instrument has no stipulation in reference to that event, nor any allusion to it. If the parties be bound for each other, then each would be liable for the others, whether they were solvent or not; and if each be bound only for himself then the insolvency of another cannot add to his engagements. It is clear, we think, that the engagement of each of these persons is strictly several and not joint, nor joint and several. The instrument begins, indeed, in the terms of a joint undertaking by all the covenantors for a full indemnity to the plaintiffs. It says, “ We, the under signed, have on our part agreed to indemnify the said Williamson Henderson and Roane.” But immediately, those general words are qualified and restrained by others, which, in the first place, limit the indemnity, and, in the second place, sever the responsibilities of the several covenantors. After setting out the agreement to indemnify the plaintiff it adds the words, “ to the extent herein set forth,” and then proceeds under a videlicit thus: “We bind ourselves in the event the said W., H. and R. should sustain loss by reason of their liability aforesaid, to bear, each of us, in equal proportions with the said W. H. and R. such loss; provided, nevertheless, that we, the undersigners, are not to be held responsible to an amount exceeding $500 each." It seems clear from these words, that a joint undertaking by the covenantors, or for each other, could not be intended. If it had been, the plaintiffs would have been at liberty to sue one of the cove-nantors for the whole loss, to the extent at least of as many sums of $500, as there were covenantors. But, instead of that, the stipulation is, that the loss shall be borne by each one of the parties in equal proportions with the plaintiff; which shows, that the loss was to be divided, and each covenantor was to pay his own share. Consequently, the plaintiffs can look to each one for no more.

The judgment must, therefore, be reversed, and judgment be entered for the plaintiffs, according to the case agreed, for the sum of $312, that being the separate share of the defendant, of tlie loss arising on the endorsements made in the year 1843. But that is subject to the payment of the sum of $100, mentioned in the case. There must also be judgment for the plaintiffs for their costs in the Superior Court, but there must be judgment against them for the costs in this court.

Per Curiam, Judgment accordingly.