M'Gill v. Bank of the United States. 12 W.

This cause comes up by writ of error from the circuit court of the United States, held for the district of Connecticut, in which the defendants here obtained a judgment against the plaintiffs, upon a penal bond, in which M'Gill was principal, the other defendants sureties. M'Gill was cashier of one of the branches of the Bank of the United States, and this bond was given in the penal sum of $50,000, conditioned for the due performance of that office.

The replication sets out a great variety of breaches, and the cause was decided below upon a special verdict, by which was found for the plaintiffs the sum of $66,548, consisting of a variety of items, upon which interest is charged severally, from the [* 513 ] date of the embezzlement or other breach to the time of finding the verdict.

The verdict then finds two payments, one of $20,000, made by one of the sureties, on the 16th of December, 1820; the other of $500, made by another of the sureties, on the 22d of December, 1820, on which they also calculate interest to the date of the verdict, and, deducting the amount of principal and interest, strike a balance of $43,182.50.

It also finds the following facts: "That the president and directors of the Bank of the United States, on the 27th of October, 1820, at Philadelphia, passed the following resolution, to wit: Whereas it appears, by the report of a committee of the office of discount and deposit at Middletown, that Arthur W. M'Gill, cashier of that office, has been guilty of a gross breach of trust, in knowingly suffering overdrafts to be made by individuals; also by making overdrafts himself; therefore, resolved, that A. W. M'Gill, cashier of the office at Middletown, be and he is hereby suspended from office till the further pleasure of the board be known.

"On motion, resolved, that the president of the office at Middletown be authorized and requested to receive into his care, from A. W. M'Gill, the cashier, the cash, bills discounted, books, papers, and other property in said office, and to take such measures for having the duties of cashier discharged as he may deem expedient."

Which resolutions were immediately transmitted by mail to the president of the Middletown office, who received them on the morning of Sunday, the 29th of the month, but did not communicate them to M'Gill until the afternoon of the 30th, between the hours of four and five in the afternoon.

It then finds that all the breaches were incurred before the 30th, and goes on to find alternatively, so as to enable the court to give judgment, according to its views of the law, as between the parties. There appear to have been various questions argued in the court

M'Gill v. Bank of the United States. 12 W.

below, some of which were decided for the plaintiff, some [* 514] for the defendant; but as the plaintiff below seeks an affirmance of the judgment, and has not sued out a writ of error, it follows that we confine ourselves to those points only which were decided against the plaintiff here. These were two, one of them going to the whole right to recover, the other to the application of the payments towards the discharge of the sum to be recovered.

The first of these was, whether the sureties were not discharged ipso facto from further liability, by the resolution of the parent bank, on the 27th; or if not on that day, then on the 29th, the day on which it was received at Middletown by mail. If discharged on either of those days, it would follow that the plaintiffs below could not have judgment, since the finding was up to the day following.

We are unanimously and decidedly of opinion, that the ground assumed by the defendants below cannot be maintained. What was there in the resolutions of the parent bank to discharge the obligors at all from their liability? The resolution was only to suspend, and this implies the right to restore. The cashier's salary went on, and had the board rescinded their resolution, what necessity would there have existed for a redelivery of his bond?

But there is no necessity for placing the decision on this ground, since, notwithstanding the resolution of the board is expressed in the present tense, a future operation must necessarily be given it, from a cause that could not be overcome, the distance of the parties from each other. Time became indispensable to giving notice, and the day on which the communication reached the president of the Middletown Bank was a day not to be profaned by the business of a bank. There was, then, no obligation to deliver the notice and dispossess the cashier until the 30th, and the law makes no fractions of a day.

The court below, in applying the payments, directed them to be deducted from the penalty of the bond, and then gave interest upon the balance thus resulting. This, with the exception of the interest, was the most favorable application possible for the defendants below; and the interest on the balance having been only allowed from the

date of the suit, and the sum thus ascertained falling short [* 515] of the penalty of the bond, *we think the defendant below has nothing to complain of. It will be discovered, by reference to dates, that the payments here made preceded the institution of the suit, and, although made by the sureties, they were made severally, for any thing that appears to the contrary from the verdict. Technically, then, the judgment to be entered would have been a judgment for the penalty of the bond, and, in applying the partial

Drummond v. Prestman. 12 W.

payment, the court would have been governed by those principles which have been transferred in practice from the courts of equity to the courts of law, in deciding on what terms a party shall be released from the penalty of his bond. These always are, on payment of principal, interest, and costs. And it can constitute no objection to the application of this principle to the case of these obligors, that no interest was allowed them during the short interval between the payment and the suing out of the writ, since the breaches were incurred long before, and interest for the same period is refused to the bank. Judgment affirmed, with six per cent. interest.

12 H. 159.

RICHARD DRUMMOND, surviving partner of CHARLES DRUMMOND, v. The Executors of GEORGE PRESTMAN.

12 W. 515.

A judgment recovered on an account against the principal, is evidence of the amount due from him, in an action against a guarantor of the account.

*THIS cause was argued by the Attorney-General and [*516 ] Meredith, for the plaintiff, and by Taney and Donaldson, for the defendant.

JOHNSON, J., delivered the opinion of the court.

This case arises on the following state of facts: Richard and Charles Drummond, being engaged in some joint mercantile adventures, which appear to have been carried on chiefly by Charles, made consignments, in the year 1803, to William Prestman, then doing business as a commission merchant in Baltimore. George Prestman, the father of William, thereupon addressed to Charles Drummond a letter of guaranty, in these terms:

"CAPTAIN CHARLES DRUMMOND:

66 Baltimore, 17th November, 1803.

"Dear Sir: My son William having mentioned to me that, in consequence of your esteem and friendship for him, you have caused and placed property of yours and your brother's in his hands for sale, and that it is probable, from time to time, you may have considerable transactions together, on my part I think proper, by this, to guarantee to you the conduct of my son, and shall hold myself liable, and do hold myself liable, for the faithful discharge of all his engagements to you, both now and in future."

The connection in business was kept up between the [517] Drum nonds and William Prestman, until Charles's death,

Drummond . Prestman. 12 W.

after which Richard, who resided in Norfolk, came up to Baltimore, to adjust the accounts of the concern with William, and then received from him an account, stated as between him and Charles Drummond, on which, after some corrections, which appear on the face of the account, the balance is struck, for which this suit is instituted.

This account commences with an acknowledgment of a balance due the Drummonds, in November, 1804, and brings down their transactions to December 20, 1805.

Upon this account, a suit was instituted against William Prestman, in 1806, in the name of Richard, survivor of Richard and Charles Drummond, and a judgment confessed. William Prestman was dead at the time of the trial of this cause.

This suit is now instituted upon the letter of guaranty; and the declaration, after setting out the letter and the subsequent transactions with William, demands the sum acknowledged due upon the account stated.

Upon the trial, the plaintiff gave in evidence the letter of guaranty, the account stated by William, parol evidence of subsequent acknowledgments of its correctness, and the record of recovery upon that account, in which he confesses judgment to Richard, as survivor of Richard and Charles Drummond, also parol evidence conducing to prove the joint dealings of the Drummonds.

In the progress of the trial, the defendants took exception to the admission in evidence of the record of recovery against William. The court overruled the exception, and it went to the jury; but the court refused to grant a prayer of the plaintiff, that they would instruct the jury that, upon the whole evidence, he was entitled to a verdict; and to this refusal the bill of exceptions is taken, upon which the principal question in this cause arises.

As evidence was permitted to go to the jury, conducing to prove as well the copartnership between Richard and Charles Drummond, as the balance due by William Prestman, and the interest of Richard

in that balance, it follows that the refusal of the court to [518] give that instruction could only have been upon the

ground that the guaranty did not cover this demand; and this, accordingly, has been the principal question made in argument. It is contended that the correct construction of this guaranty will exclude a copartnership debt; that, in its language and import, it is confined to liabilities to be incurred by William to Charles or Richard severally, or to Charles individually, and cannot be extended to a copartnership interest under a trade ostensibly carried on as between Charles solely and William.

We have considered this question attentively, and are unanimous

Drummond v. Prestman. 12 W.

in the opinion that the guaranty may well be construed to cover the joint trade of Charles and Richard. An interest of Richard is expressly contemplated by the guaranty, and the language of the letter seems more naturally adapted to a joint than a several interest. For, a concern being represented in the person of any one of its members, the use of the pronoun of the second person is naturally suggested and familiarly resorted to when we address ourselves to an individual of the concern. This court is not called upon to decide whether the words might not also be correctly applied to an individual interest as well as a joint concern. It is enough, for the purposes of this action,

if they will cover the latter.

It is a rule, in expounding instruments of this character, "that the words of the guaranty are to be taken as strongly against him as the sense will admit." But it is not necessary to test this letter by any canon of the law of guaranty more rigid than the first and most general, to wit," that no party shall be bound beyond the extent of the engagement which shall appear from the expression of the guaranty and the nature of the transaction." There is nothing on the face of the letter which holds out the idea of a connection between William and the Drummonds, exclusively in their individual capacity. The object is to throw business into the hands of the guarantee's son, and it could not have been inconsistent with this idea to guarantee a joint trade as well as an individual trade. The grammatical construction of the language will sanction this idea, and the nature and object of the guaranty favors it. If it be conceded [* 519 ] that there is a latent ambiguity on the face of the instrument, that ambiguity might well be explained by the objects of the instrument and the circumstances attending its origin. We are therefore of opinion that the court erred in refusing the instruction as prayed, and for that reason the judgment must be reversed, and a venire facias de novo awarded.

But, as is the practice of this court, where questions present themselves on the record, and are argued, upon which the same cause may possibly be brought back here, the court has also considered the question whether the record of the judgment between this plaintiff and William was properly admitted in evidence.

On this subject it is necessary to observe that it was not set up as a plea in bar, nor as a decision conclusive of the right of the party to recover in this action. There was evidence in the cause to establish he defendant's guaranty, and the balance acknowledged by WilLam; also, evidence conducing to prove the joint trade carried on by Charles and Richard Drummond, through the hands of Charles, with William. This record was certainly competent to prove a fact which