SUSAN LAWRENCE, PLAINTIFF IN ERROR,
v.
ROBERT McCALMONT, HUGH McCALMONT, AND WILLIAM JOHNSON NEWELL, DEFENDANTS.

*435 The cause was argued by Mr. Wood, for the plaintiff in error, (Susan Lawrence,) and was to have been argued by Mr. Lord and Mr. Sergeant, for the defendants in error.

*445 Mr. Justice STORY delivered the opinion of the court.

This is a writ of error to the Circuit Court for the southern district of New York.

On the 21st of November, 1838, J. and A. Lawrence obtained from the agents (Messrs. Gihon and Co.) at New York, of McCalmont, Brothers and Co., of London, the following letter of credit:

Gent.: — We have granted to Messrs. J. and A. Lawrence of this city, a credit with you of £10,000, say ten thousand pounds sterling, to be availed of within six months from this time, in such drafts as they may direct, at four months' date, against actual shipments of goods for their account, and coming to their address; said goods to be forwarded through you or your agents.

The above credit is granted under their engagement to cover your acceptances before maturity, by direct remittances from this country of approved sixty day bills — seconds of exchange to be handed to us for transmission to you. You are to charge one per cent. commission on the amount accepted, and to keep the account at five per cent. interest per annum.

The letter of credit was delivered on Mr. Lawrence's proposal of his mother's (the plaintiff in error's) security for the credit. On the 17th of December, 1838, Mrs. Lawrence gave the following guarantee:

Gent.: — In consideration of Messrs. J. and A. Lawrence having a credit with your house, and in further consideration of one dollar *446 paid me by yourselves, receipt of which I hereby acknowledge, I engage to you that they shall fulfil 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 guaranty you from all payments and damages by reason of their default.

You are to consider this 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.

Under these documents, McCalmont, Brothers and Co. made the stipulated advances, which were repaid; and on the transactions included within the six months from 21st of November, 1838, nothing has been claimed by the London house. About the expiration of the six months, Mr. Lawrence (one of the firm of J. and S. Lawrence) at New York called on the agents of McCalmont, Brothers and Co., and asked if it was agreeable for the agents to continue the credit for £10,000. The reply of one of the agents was, that there was no objection to continue it on the same terms as before, stating that it was to be on the mother's guarantee attached to the previous credit. Mr. Lawrence then answered, that he did not expect it on any other terms, or without the guarantee. The agent then wished time to examine whether the guarantee was for a particular credit, or was a continuing guarantee; and having referred to the letter of guarantee, they drew up and delivered to Mr. Lawrence a second letter of credit, (Mr. Lawrence and the agents both agreeing that it was a continuing guarantee, and as such no new letter was needed from the mother.) The second letter of credit, dated on 12th of June, 1839, was as follows:

Gent.: — With reference to our letter of 21st November last, opening a credit on your good selves, favour Messrs. J. and A. Lawrence for £10,000, to be drawn within six months from that date, and which expired by limitation last month. We hereby renew the same for a like period from the date hereof, and under the same stipulations, *447 with this proviso, that the bills be drawn by, or in favour of parties permanently resident in Europe; and if made from the continent, they be made at the customary date, say three months.

Under this second letter of credit bills were drawn and paid by McCalmont, Brothers and Co., to an amount exceeding in the whole the £10,000 stipulated for. The bills being all drawn at four months. The firm of J. and A. Lawrence not having made any remittances to pay the new advances, and firm having failed, the agents of the London house on the 29th day of May, 1840, addressed the following letter to Mrs. Susan Lawrence, giving her notice of the non-payment of the advances.

Madam: — We enclose on behalf of Messrs. McCalmont, Bros. and Co., a copy of the account of Messrs. J. and A. Lawrence with them, showing a balance due of £10,349 8s. 5d. — say ten thousand three hundred and forty-nine pounds eight shillings and five pence sterling, on first January last, with interest. These gentlemen not having fulfilled their engagements to reimburse this account, we claim payment of you under your guarantee to Messrs. McCalmont, Bros. and Company.

She declining to pay the deficit, the present action of assumpsit was brought against her to enforce the payment. At the trial upon the general issue, in addition to the facts already stated, it was in evidence that during the whole period of these transactions, Mrs. Lawrence resided at Brooklyn, (New York,) in the same house with her sons, J. and A. Lawrence. There was also evidence in the cause to show that McCalmont, Brothers and Co., had by their agents, certain notes belonging to the firm of J. and A. Lawrence, and endorsed by the firm for collection, and the proceeds when received were to be applied towards the liquidation of the debt due to the London house, subject to their encashment on being paid at maturity, under which the sum of £1309, 16s. 6d. had been realized. The notes thus deposited for collection, which were dishonoured at maturity, were protested accordingly, and the original plaintiffs offered the protests and notices to J. and A. Lawrence of the dishonour in evidence, but the evidence as to some of the notices was *448 not full. Much other evidence was given at the trial, which, however, it is not necessary to state.

The counsel for Mrs. Lawrence then asked the court to charge the jury as follows:

1st. That the said credit of 21st November, 1838, is a standing and continuing credit during the six months.

2d. That defendant's guarantee of 17th December, 1838, is confined to the said credit, both as to time and amount.

3d. That the acceptances and claims of the plaintiffs demanded in their declaration in this suit, are not covered by the guarantee of the defendant aforesaid.

4th. That the new credit aforesaid of the 12th of June, 1839, is not a continuance or repetition of the first credit, but a departure from it, and is not covered by or embraced in the defendant's said guarantee.

5th. That the nominal consideration of one dollar, and the past consideration stated in defendant's said guarantee, are not, nor is either of them, sufficient to sustain the said guarantee.

6th. That the evidence that the said J. and A. Lawrence agreed to give a guarantee at the time said credit of 21st November, 1838, was given, is not sufficient in law to render valid the consideration expressed in defendant's said guarantee, or to sustain the said guarantee.

7th. The facts being ascertained, the question whether the notice given to the defendant by the plaintiffs of the failure of the said J. and A. Lawrence to remit to cover the plaintiffs' acceptances was reasonable, is a question of law, and no notice, sufficient in law, was given of such failure to the defendant.

8th. If the sufficiency of such notice be a question exclusively of fact, a reasonable and sufficient notice was not given to her of such failure of J. and A. Lawrence to remit as aforesaid.

9th. The notes received by the plaintiffs, through their agents to collect, ought, when there was a failure of payment, to have been regularly protested, and due notice thereof served on the defendant and J. and A. Lawrence; and, on failure thereof, a credit should be allowed for the same.

The judge thereupon charged the jury, that the plaintiffs were not precluded from recovering under the guarantee in evidence by reason of any supposed want of consideration therefor; and the same was not without sufficient consideration.

*449 That the said guarantee of the 17th December, 1838, was not limited to the credit of November 21, 1838, but was a standing and continuing guarantee, and did apply to, and was sufficient to embrace, transactions arising after the said credit of November, 1838, was expired.

That the new credit of June 12, 1839, and the advances and transactions under it, were not in law without the scope of the guarantee of December 17, 1838, and that the plaintiffs were, under the evidence, entitled to recover for the same under the said guarantee.

That the defendant was entitled to a reasonable notice of the default of the principal debtors, to enable her to take measures for her indemnity; that it was for the jury to consider, whether under all the circumstances in evidence, the defendant had not had such notice.

That as to the notes turned over by the principal debtors to J. Gihon and Co., as the same were merely lodged with the latter, on their engagement that the proceeds of them, when received, were to be passed to their credit, the want of protest of any such notes as were dishonoured, or of notice thereof to the said J. and A. Lawrence would not entitle the defendant to charge the plaintiffs with the amount of such notes, or to claim a deduction for that amount.

And with that charge left the said cause to the jury: unto which charge, and to the refusal of the judge to charge otherwise, and as requested by defendant as aforesaid, the defendant's counsel then and there excepted.

The jury found a verdict for the plaintiffs for $47,105 97 cents; upon which judgment was rendered for the plaintiffs; and upon that judgment and the exceptions taken at the trial the present writ of error has been brought.

Some remarks have been made on the argument here upon the point in what manner letters of guarantee are to be construed; whether they are to receive a strict or a liberal interpretation. We have no difficulty whatsoever in saying, that instruments of this sort ought to receive a liberal interpretation. By a liberal interpretation, we do not mean, that the words should be forced out of their natural meaning; but simply that the words should receive a fair and reasonable interpretation, so as to attain the objects for which the instrument is designed and the purposes to which it is applied. We should never forget that letters of guarantee are commercial instruments — generally drawn up by merchants in brief language — sometimes inartificial, and often loose in their structure and form; and to construe the words *450 of such instruments with a nice and technical care would not only defeat the intentions of the parties, but render them too unsafe a basis to rely on for extensive credits, so often sought in the present active business of commerce throughout the world. The remarks made by this court in the case of Bell v. Bruen, 1 How. R. 169, 186, meet our entire approbation. The same doctrine was asserted in Mason v. Pritchard, 12 East R. 227, where a guarantee was given for any goods he hath or may supply W.P. with, to the amount of £100; and it was held by the court to be a continuing guarantee for goods supplied at any time to W.P. until the credit was recalled, although goods to more than £100 had been first supplied and paid for; and the court on that occasion distinctly stated that the words were to be taken as strongly against the guarantor as the sense of them would admit of. The same doctrine was fully recognised in Haigh v. Brooks, 10 Adol. and El. 309, and in Mayer v. Isaac, 6 Mees. and Wels. 605, and especially expounded in the opinion of Mr. Baron Alderson. It was the very ground, in connection with the accompanying circumstances, upon which this court acted in Lee v. Dick, 10 Peters, 482, and in Mauran v. Bullus, 16 Peters, 528. Indeed, if the language used be ambiguous and admits of two fair interpretations, and the guarantee has advanced his money upon the faith of the interpretation most favorable to his rights, that interpretation will prevail in his favour; for it does not lie in the mouth of the guarantor to say that he may, without peril, scatter ambiguous words, by which the other party is misled to his injury.

Passing from these general considerations, let us now address ourselves to the points made at the argument. The first point is, that the second advance was made upon terms and under an agreement materially variant from that on which the guarantee was given, without any communication with the guarantor or her consent thereto. The variances insisted on are two; first, in requiring the bills to be drawn by or in favour of parties permanently resident in Europe; secondly, that if the bills were drawn from the continent of Europe, they should be made at the customary date, say three months. We think that there is no variance whatsoever, which is not fairly within the scope of the original guarantee, and was so contemplated by J. and A. Lawrence, as well as by the agents of the London house. This is explicitly proved by the evidence; for, upon the question arising, both the Lawrences and the agents agreed that it was a continuing guarantee, and as such no new letter of guarantee was needed. It is *451 true that Mrs. Lawrence was no party to this interpretation of the instrument; but then it is strong evidence to establish that it was neither a forced nor unnatural interpretation of the words. And the agents of the London house agreed to make the second advance upon the faith of it.

Now, looking to the very words of the guarantee, we see that it contemplated — not a single advance and then it was to end — but a continuing guarantee, and the very words are found in it. It also contemplated not only agreements which had been already made between J. and A. Lawrence and the agents, but also future agreements. The guarantor says: "I engage that they shall fulfil the agreements they have made, and shall make with you for meeting and reimbursing the payments which you may assume." And again: "You are to consider this a standing and continuing guarantee without the necessity of apprizing me from time to time of your engagements and advances for the house." "So that new engagements and new advances were contemplated to be made to which the guarantee should attach without notice thereof." And this is not all — for the guarantee goes on to provide for its continuance in case of a change in the partners of either firm, (a change which would ordinarily be fatal to a guarantee;) and that the guarantee should apply to and continue upon transactions afterwards between the firms so changed, until notified by her to the contrary. It seems plain from all this language, that a series of new transactions, new agreements, and new engagements were within the contemplation of the parties; not advances for six months alone, but advances from time to time, for an indefinite period, until notice to the contrary should be given by the guarantor. It is difficult to conceive of any language more definite and more full to express the real intention of the parties. The original advance was, indeed, agreed to be made in the manner stated in the first letter of credit; and if there be any variance between the terms of the first and the second letter of credit, that was left solely and exclusively for the immediate parties J. and A. Lawrence and the agents to adjust and consider. They might enter into any new engagements as to the mode of drawing the bill, and the time which they were to run at their pleasure, without breaking in upon the true intention of the guarantee. All the stipulations of the first letter of credit were retained in the second, and an additional provision made, that if bills were drawn from the continent of Europe they should be made at the customary date and by a permanent resident. But this *452 left J. and A. Lawrence at full liberty to draw direct on London at four months, if they chose; and in point of fact no bills were ever drawn by them except direct on London, and not from the continent. The additional liberty given, or condition imposed, was not availed of; and, if it had been, it would not have in any manner exonerated the guarantor from her responsibility. Without, therefore, looking to the question whether these variances might or might not have been material, if new arrangements and engagements had not been within the scope of the guarantee, we are of opinion, that the objection is, in the present case, not maintainable.

This view of the matter disposes also of the second, third, and fourth points made at the argument.

The fifth point is, that there is no valid consideration to support the guarantee. This is pressed under two aspects; the first is, that the consideration was past and not present; for the letter of credit had been already delivered to J. and A. Lawrence by the agents of the London house. The second is, that the payment of the one dollar is merely nominal and not sufficient to sustain the guarantee, if it had been received; and it is urged that it was not received. As to this last point, we feel no difficulty. The guarantor acknowledged the receipt of the one dollar, and is now estopped to deny it. If she has not received it, she would now be entitled to recover it. 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 other contracts. A stipulation in consideration of one dollar is just as effectual and valuable a consideration as a larger sum stipulated for or paid. The very point arose in Dutchman v. Tooth, 5 Bingham's New Cases, 577, where the guarantor gave a guarantee for the payment of the proceeds of the goods the guarantee had consigned to his brother, and also all future shipments the guarantee might make in consideration of two shillings and six-pence paid him, the guarantor. And the court held the guarantee good and the consideration sufficient. In Brooks v. Haigh, 10 Adol. and El. 309, 323, the court held that a surrender by the guarantee of a former guarantee, even if it was not of itself binding upon the guarantor, was a sufficient consideration to take the case out of the statute of fraud and to sustain a promise made on the footing thereof. But, independently of all authority, we should arrive at the same conclusion. The receipt of the one dollar is acknowledged; no *453 fraud is pretended or shown; and the consideration, if standing alone in a bona fide transaction would sustain the present suit.

As to the other point, that the consideration was past, it admits of several answers, each of which is equally decisive. In the first place, although the Messrs. Lawrence had received the letter of credit before the guarantee was given, yet it was a part of the original agreement contemporaneous with the letter of credit, that it should be given; and if the guarantee had not been given, the whole advance might have been recalled as a fraud upon the London house. In the next place, it does not appear that all the bills for the £10,000, under the first letter of credit, were drawn before the guarantee was actually given; and if they were not, certainly it would attach upon the bills drawn under the first credit after it was actually given. The contract was then a continuing contract on both, and partially performed only by one. In the next place, the guarantee itself uses language susceptible of being treated as a present continuing consideration in fieri. It is "in consideration of Messrs. J. and A. Lawrence having a credit with your house;" now, the word "having" imports a present or future advance, just as much as a past. The word "having" is in the present tense; and if the parties then understood the letter of credit to be in fieri, and to be absolute only upon a condition subsequent, viz.: the giving of the guarantee, the word is the most appropriate which could be used. The case of Haigh v. Brooks, 10 Adol. and El. 309, approaches very near to the present. There the guarantee was "in consideration of being in advance to L. &c., I guaranty, &c." The Court of King's Bench though that the words "being in advance" did not necessarily import a past advance, but might be applied to a present or future advance.

But that which puts the whole matter in the clearest light and beyond the reach of legal controversy, is that the advances now sued for were all made after the second letter of credit was given; and if the guarantee applied (as we hold it did) to those subsequent advances under the new engagements, then the consideration was complete as upon a present and not as upon a past consideration. In every view, therefore, in which we can contemplate the objection it has no just foundation in law.

As to the sixth point on the question, whether due notice of the failure of Messrs. J. and A. Lawrence to repay the advances had been given; it was a mere question of fact for the consideration of the jury, as to whether the guarantor had reasonable notice or not. *454 They have found a verdict for the plaintiffs, and we are not at liberty to disturb it in a court of error.

As to the seventh point, the notes having been left for collection only with the agents of the London house, although endorsed by the Messrs. Lawrence, they do not fall within the strict rules of commercial law applicable to negotiable paper. Admitting for the sake of the argument, that notice was not punctiliously given by the agents, still it resolves itself into a mere question of due diligence on the part of the agents to collect the notes, and falls under the general law of agency. No evidence was shown at the trial to establish any loss or damage on the part of Mrs. Lawrence for want of due protest and notice, (if they were not made;) and in the absence of such proof we are not at liberty to presume that the agents did not do their duty.

The case of Swift v. Tyson, 16 Peters, 1, is entirely distinguishable from the present in its leading circumstances. There, the question was, not whether a person receiving a note as collateral security or for an antecedent debt was not bound to due diligence in its collection, otherwise he made it his own, which was not doubted; but, whether taking it as collateral security or in payment of an antecedent debt, he was not to be treated as a bona fide holder for a valuable consideration, unaffected by any unknown equities between the original parties. This court held that he was.

Upon the whole we are all of opinion that there was no error in the rulings of the court, and the judgment is, therefore, affirmed with costs.

ORDER.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States, for the southern district of New York, and was argued by counsel. On consideration whereof, it is now here ordered and adjudged by this court, that the judgment of the said Circuit Court in this cause be, and the same is hereby affirmed with costs and damages at the rate of six per cent. per annum.