Mauran v. Bullus - 41 U.S. 528 (1842)
U.S. Supreme Court
Mauran v. Bullus, 41 U.S. 16 Pet. 528 528 (1842)
Mauran v. Bullus
41 U.S. (16 Pet.) 528
Construction of a letter of guarantee.
In the construction of all written instruments, to ascertain the intention of the parties is the great object of the court, and this is especially the case in acting upon guarantees.
Generally all instruments of suretyship are construed strictly as mere matters of legal right. The rule is otherwise where they are founded on a valuable consideration.
The case, as stated in the opinion of the court, was as follows:
The defendant in error and Joshua Mauran, Jr., of the City of New York, on 8 September 1836, entered into articles of co-partnership, in the trade and business of general shipping merchants, and of buying and selling merchandise on their own account, and also on commission for the account of others; which was to continue three years. Mauran agreed to pay into the firm, as capital stock, such sums as he should be able to realize on closing the business of merchandizing, in which he had been engaged. Bullus agreed to pay a sum of from $28,000 to $30,000 in cash.
And it was stipulated, that Mauran should not withdraw from the concern more than $2,000 per annum, nor Bullus more than $3,000, unless by consent of the co-partners in writing. Mauran covenanted, that within a reasonable time, he would pay the debts owing by him, out of his private funds, and that on or before 8 September instant, he would give to Bullus satisfactory security for the performance of this covenant.
On 9 September 1836, the defendant below wrote to Bullus the following letter:
"Mr. Edward Bullus -- Dear Sir: "
"As you are about to form a connection in the mercantile business in the City of New York, with my son, Joshua Mauran, Jr., under the firm of Mauran & Bullus. And as the said J. Mauran,
Jr., having been, and is at this time prosecuting mercantile business in that city, on his own account. Now therefore, in consideration of the same and at the request of Joshua Mauran, Jr., I hereby agree to bear you harmless in regard to the closing up and settlement of the said Joshua Mauran, Jr.'s former business, and I hereby guarantee you against any loss or liability you may sustain from the former business of said Joshua Mauran, Jr., &c."
The action was brought by Bullus on this guarantee. On the trial, an account against the old concern of Joshua Mauran, Jr., with the firm of Mauran & Bullus, was given in evidence, from which it appeared that the old concern was indebted to the new in the sum of $5,403.75. And it was proved by Joshua Mauran, Jr., that the partnership continued until August 1839, when the firm failed. That Bullus paid into the partnership stock $29,695.86, and that the witness was unable to pay anything. That at the time of forming the co-partnership, his father, the defendant, was in New York, with whom he conversed relative to the terms of the partnership. That he showed his father the articles or the minutes from which they were drawn, and was satisfied that the conditions were fully known to him. But the witness stated that he did not know of his father's having any knowledge that the firm were to settle and pay the debts owing by the witness.
The witness stated that certain loans were made by the firm to him in anticipation of the receipts from the old concern, which were charged. After the completion of the articles of co-partnership, the witness delivered to his father a paper, drawn by the attorney who drew the articles, for his father's signature; his father did not sign the paper, but after his return to Providence, sent the letter of guarantee. Many of the debts of his old concern, the witness stated, became due before sufficient funds could be collected from the same to meet them, and these debts were paid by the firm. That this was a mode of settlement of the accounts of the old concern, not originally contemplated. His father often inquired what the deficiency of the old concern would amount to, but he did not know, to the knowledge of the witness, that the old concern was indebted to the firm.
That the firm, on their failure, assigned all their property and estate to William D. Robinson including the debts of the old concern, which amounted to the sum of $12,418.95. These debts were credited to the stock of Joshua Mauran, Jr., and at the time, they were all, except one of George Bucklin, of about $1,800, considered bad, and that one had been released, though the witness considered him bound in honor to pay it. Various accounts between the firm and Joshua Mauran, junior and senior, and other persons, were given in evidence.
The defendant introduced his son, Suchet Mauran, as a witness, who stated, that his father brought with him, on his return from New York, about 8 September 1836, a bond, binding him to pay the debts of Joshua Mauran, Jr. It was under seal, and the witness read it, and it was, as he believes, in the handwriting of Mr. Bonney, of the City of New York, who wrote the articles of co-partnership; that his father would not sign the bond, but sent the letter of guarantee. The bond remained among the loose papers of his father, for some time, but after a diligent search could not be found. That the bond, by its terms, required his father to pay all the outstanding debts of Joshua Mauran, Jr., to his creditors, or to whoever might pay them.
The evidence being closed, the defendant below moved the court to give the following instructions:
1. That said letter of guarantee of the defendant, dated 9 September, contained no authority to the said Mauran & Bullus to pay any part of the debts of the said Joshua Mauran, Jr.'s old concern; that if it authorized any payment of said debts, by any person, it was by the said Edward Bullus alone; and that the said Edward Bullus could not recover said sum of $5,403.75, or any part thereof; inasmuch as he had paid no part thereof, the whole having been paid by the said Mauran & Bullus. Which instruction the court refused to give, as prayed for; on the contrary, they instructed the jury that if, from the evidence submitted to them, they were of opinion, that at the time of signing said letter of guarantee, it was understood both by the plaintiff and the defendant, that the plaintiff was to be at liberty to
pay the said debts of the said Joshua Mauran, Jr., either out of his own private funds, or out of the partnership funds of the firm of Mauran & Bullus, and in either case, the plaintiff was to be entitled to indemnity therefor, under and in virtue of the said letter of guarantee, and if they were of opinion, from the facts in said case, that no funds whatsoever had been paid into the partnership by the said Mauran, Jr., as a part of the capital stock thereof, and that all the capital stock had been paid by the said Bullus, and that he was and still remained a creditor of the firm to the full amount of such capital stock; then the plaintiff was entitled to recover in the present suit, such sums of money as he had paid in discharge of the said debts of Mauran, Jr., either out of his own private funds or out of the funds of the said firm of Mauran & Bullus, for which he had not otherwise received any indemnity.
2. And the defendant's counsel prayed the court further to instruct the jury, that even if said letter had imposed upon said defendant any obligation to pay said debts to the said Edward Bullus, or to the said Mauran & Bullus; that the said Mauran & Bullus, by assigning the uncollected debts due to the said Joshua Mauran, Jr., to the said Robinson their assignee, and placing them entirely beyond the control, or agency and management of the defendant, had discharged the defendant from any liability which might originally have arisen from said letter of guarantee. Which instruction the court refused to give, but instructed the jury, that if they should find a verdict for the plaintiff, they ought to deduct from the amount of the plaintiff's claim in the writ, the full value of the debts of the said Mauran, Jr., so assigned, and charge it against the claim of the plaintiff, and render a verdict in his favor for the balance only, after such deduction.
To the instructions refused and those given, the defendant excepted.
The jury, under the instructions of the court, found a verdict in favor of the plaintiff for $3,764.25, on which a judgment was entered. The defendant prosecuted this writ of error.