Wadsworth v. Allen

1. A letter of credit addressed to W & W may be proved to have been intended for W, W & Co., so as to hold the writer bound to the latter upon it. 2. A guarantor may specify in the letter of credit which he gires, the terms on which he will be bound; and if these terms are >■ complied with he is bound, though the law, in the absence of all prescription of terms in his letter of credit, would have prescribed the performance of other acts by the party seeking to subject him upon his guaranty. 3. A guarantor undertaking to pay upon receiving reasonable notice of the failure of the principal debtor to pay the debt when due, dispenses with notice of the acceptance of the guaranty by the parties to whom it is addressed; even if the law would have required such notice. 4. What is reasonable notice of the failure of the principal to pay, is a question for the jury upon the testimony. 5. The fact that the principal gave his bond for the goods he purchased did not release the guarantor.

This was an action brought in the Circuit court of Cumberland county by John E. Wadsworth, Daniel B. Turner and George S. Palmer, surviving partners of themselves and Orren Williams, late merchants and partners doing business under the name of Wadsworth, Williams and Co. against Charles B. Allen and William Phaup. The declaration counted on the following letter of credit: Raines’ Tavern, October 27th, 1840. Messrs. Wadsworth ip Williams, Richmond. Gentlemen, Please to deliver to Mr. Daniel Totty, or to his order, merchandise to an amount not exceed- , ing in value, in the whole, five hundred dollars; and on your so doing, we hereby hold ourselves accountable to you for the payment of the same, in case Mr. Daniel Totty should not be able so to do, or should make default ; of which default you are required to give us reasonable and proper notice. Your obd’t serv’ts, Charles B. Allen, William Phaup. On the trial of the cause, after the above paper had been read, and the handwriting of the defendants proved, the plaintiffs offered to read the deposition of William B. Isaacs, which had been taken by consent to be read as evidence on the trial, subject to any legal objections to which the testimony would be subject if given in Court. Whereupon the defendants moved the Court to strike out the following passages, viz: “That the said John E. Wadsworth and OrrenWilliams had, previous to the year 1840, transacted business as merchants and partners under the name of Wads-worth & Williams; which firm was dissolved in the year 1836, and succeeded by the said Wadsworth, Williams and D. B. Turner, under the name of Wadsworth, Williams &• Co.; and in 1839 they were succeeded by the same parties and George S. Palmer; the name of the firm continuing as last mentioned. The plaintiffs were frequently addressed and spoken of as Wadsworth & Williams, but that was not the style of the firm in 1840, nor has it been since 1836; but the successors were in the habit of recognizing letters and orders addressed to Wadsworth & Williams, as intended for themselves; and of acting under them. That the said Wads-worth & Williams were not, either jointly or separately, engaged in the sale of merchandise on their individual account, or in any other connexion, after the year 1836, except, as members of the firm of Wadsworth, Williams & Co.” The Court sustained the motion, and excluded the evidence; and the plaintiffs excepted. The plaintiffs then proved, that in the year 1840, .Orren Williams then being alive, Daniel Totty of the county of Cumberland, exhibited to the concern of Wadsworth, Williams & Co. the letter of credit above given. That on the faith of that letter they sold and delivered to Totty goods to the value of 395 dollars 47 cents, for which they took his bond dated the 30th of October, payable in six months. That on the 30th of April 1841, they wrote to Messrs. Allen and Phaup, referring to the letter of credit, stating the amount of Totty’s purchases upon the faith of that letter; and that the money was due that day and had not been paid : But there was no proof that the letters had been received. They proved further, that on the 31st of May 1841, their agent called on Phaup, at his house, and informed him that the money had not been paid by Totty, and asked for payment of it by Phaup. That on the same day the agent went to the house of Allen, to see him on the same subject; but he was not at home. That the agent saw Allen at the March term of the Court for 1842, when he attended as a witness in the case, when Allen told him that Totty had placed claims in Allen’s hands to pay the said debt. That he saw Allen again in 1842, when Allen told him that he did not then have the money to pay the debt, but that he would pay it in a short time if the agent would have the suit dismissed. And it was also proved by the plaintiffs’ counsel, that either at the June or July term of the County court of Cumberland in 1841, he met with the defendant Allen, and exhibited to him the letter of eredit and bond of Totty, and informed him that he held , , „ them for collection. After the plaintiffs had introduced their evidence the defendants moved the Court to exclude from the jury the letter of credit hereinbefore mentioned, as incompetent to charge the defendants in this cause ; which motion the Court sustained, and excluded the letter; and the plaintiffs again excepted. There was a verdict and judgment for the defendants ; whereupon the plaintiffs applied to this Court for a supersedeas, which was allowed.