Opinion
June Term, 1842.
1. In an action for breach of an agreement which is in the nature of a guaranty, if the circumstance which is alleged as the foundation of the defendant's liability is more properly within the knowledge and privity of the plaintiff than the defendant, then notice thereof should be averred in the declaration and proved on the trial.
2. But where it does not lie more properly within the knowledge of one of the parties than the other, notice is not requisite.
APPEAL from Bailey, J., at Spring Term, 1842, of BURKE.
No counsel on either side.
This was an action of covenant, brought upon the following instrument, to wit:
I, John Bradley, do hereby agree to bind myself to make all the bad debts created at the store in Buncombe County, North Carolina, at a place called Limestone, trading under the firm of Bradley, Lewis McKesson, to wit, John Bradley, George W. Bradley, Elias D. Lewis, and William F. McKesson, and as said Lewis McKesson has instituted suit, we have this day settled all matters on the following conditions: That I, John Bradley, do hereby bind myself, heirs and assigns, to see Lewis McKesson paid for all notes and accounts created at the concern, so soon as they are handed over to an officer and he returns the same insolvent or that he cannot collect them; and it is further understood that Lewis McKesson pay all the costs of said suit, returnable to Burke Superior Court, against said Bradley. Entered into this 24 November, 1837.
Witness my hand and seal. JOHN BRADLEY. [SEAL]
(304) The evidence was that the books of accounts and notes were handed over to McKesson; that he drew off the accounts and handed them and the notes to a constable for collection; that many of them could not be collected, and several of the debtors on the books were totally insolvent. The firm was composed of Lewis, McKesson, John Bradley, the defendant, and George W. Bradley; and the warrants were brought in the names of all. After the plaintiffs had closed their evidence, the defendant objected that they could not recover, for the reason that the undertaking was a collateral one, and that no notice had been given to him, before suit brought, that the debtors could not pay or were insolvent. The plaintiffs contended that notice was not necessary, because the defendant knew as much about the situation of the debtors as they did; that the debts were contracted with him, and all they had to show was that the debtors were insolvent or that the officer had returned (as he had done) that the notes and accounts could not be collected. A verdict was taken by consent for the plaintiffs, subject to be set aside and a nonsuit entered if the court should be of opinion that notice was necessary. And the court, after hearing argument, being of that opinion, the verdict was set aside and judgment of nonsuit entered, from which the plaintiffs appealed.
The defendant bound himself to pay all notes and accounts created at the firm, so soon as they were handed over to an officer and he returned the same insolvent or that he could not collect them. The papers were then placed in the hands of one of the plaintiffs. The officer was not named in the covenant; the plaintiffs had a right to select what officer they pleased, and it seems they did so. Many of the accounts could not be collected, the debtors being insolvent. The constable had sued the debtors in the name of the partners of the firm, the defendant being one of them. The judge was of opinion that the undertaking of the defendant was a collateral one; and, as no notice had been given him, before action brought, that the debtors would not pay (305) or were insolvent, that the plaintiffs should be nonsuited. It was insisted on behalf of the plaintiffs that the return of the constable that the debtors were insolvent was a fact as well known to the defendant as it was to the plaintiffs, and that he was bound in law to take notice of it. The rule of law in this respect appears to be that wherever the circumstance which is alleged as the foundation of the defendant's liability is more properly within the knowledge and privity of the plaintiff than the defendant, then notice thereof should be averred in the declaration and proved on the trial. Herrings' case, Cro. Ja., 423; 2 Saund., 62; Rex v. Holland, 5 Term, 62; Spooner v. Baxter, 16 Pick., 419. But where it does not lie more properly within the knowledge of one of the parties than the other, notice is not requisite; as if a man contract to do a thing on the performance of an act by a stranger, or to give for a commodity so much as a third person named, notice need not be averred, for it is in the knowledge of the defendant as much as in that of the plaintiffs, and he ought so to take notice at his peril. 2 Saund., 62 a; 1 Chitty Plead., 328; 1 Saund., 117, note 2. In this case the plaintiffs were to place the accounts and notes in the hands of an officer for collection; the particular officer is not named in the covenant; he is to be selected by the plaintiffs; the plaintiffs are, of course, to use reasonable diligence in establishing the claims before the proper courts and causing them to be made available. Who the officer was, and what were the acts and doings of that officer, were facts, we think, more properly within the knowledge and privity of the plaintiffs than of the defendant. Notice thereof should have been averred and proved, according to the first class of authorities cited above. The covenant of the defendant was, as it seems to us, in the nature of a guaranty of the notes and accounts; and it has been repeatedly decided in this State that before a person can be made liable upon his guaranty, he must have reasonable notice of the failure to obtain the debt, after reasonable diligence had been used by the guarantee. Green v. Ricks, 14 N.C. 362; Adcock v. Fleming, 19 (306) N.C. 470. The fact of the warrants having been brought in the name of the partners does not alter the case, because the plaintiffs and their officers were the only actors in prosecuting the said demands. The judgment must be affirmed.
PER CURIAM. Judgment affirmed.
Cited: Weatherly v. Miller, 47 N.C. 167.