Lawrence v. McCalmontAnnotate this Case
43 U.S. 426
U.S. Supreme Court
Lawrence v. McCalmont, 43 U.S. 2 How. 426 426 (1844)
Lawrence v. McCalmont
43 U.S. (2 How.) 426
The following guarantee, viz.:
"In consideration of Messrs. J. & A. Lawrence having a credit with your house, and in further consideration of $1 paid me by yourselves, receipt of which I hereby acknowledge, I engage to you that they shall fulfill the engagements they have made and shall make with you for meeting and reimbursing the payments which you may assume under such credit at their request, together with your charges, and I guarantee you from all payments and damages by reason of their default."
"You are to consider this as a standing and continuing guarantee, without the necessity of your apprizing me from time to time of your engagements and advances for their house, and in case of a change of partners in your firm or theirs, the guarantee is to apply and continue to transactions afterwards, between the firms as changed until notified by me to the contrary."
is a continuing guarantee, and includes not only transactions under a letter of credit existing at the date of the guarantee, but also transactions which arose under a second letter granted at the expiration of the first, although the second credit contained a proviso
"that the bills be drawn by or in favor
of parties permanently resident in Europe, and if made from the continent, they be made at the customary date, say three months."
A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of fraud, sufficient to support an action on any parol contract, and this is equally true as to contracts of guarantee as to others.
The consideration in this case was not past.
The question whether or not the guarantor had sufficient notice of the failure of the principals to pay the debt was a question of fact for the jury.
Where notes are deposited for collection by way of collateral security for an existing debt, the case does not fall within the strict rules of commercial law applicable to negotiable paper. It falls under the general law of agency, and the agents are only bound to use due diligence to collect the debts.
The facts were these:
Robert McCalmont and the other defendant in error, were co-partners in trade in London, trading under the name of McCalmont, Brothers & Company.
In the year 1838, J. & A. Lawrence were merchants who resided in Brooklyn, near New York, in the same house with their mother, Susan Lawrence the plaintiff in error. Their counting house was in the city. McCalmont, Brothers & Co. had agents, J. Gihon & Co., also residing in New York.
On 21 November, 1838, J. & A. Lawrence obtained from the agents at New York the following letter:
"New York, 21 Nov. 1838"
"Messrs. McCalmont Brothers & Co., London: "
"Gent.: We have granted to Messrs. J. & A. Lawrence of this city a credit with you of