Where the vendor of a certificate of stock guarantees its payment, the promisee is not bound to exhaust his remedy against the corporation before bringing suit upon the guaranty. In an action upon such guaranty, evidence as to the present value of the certificate is immaterial. If the promisee, acting in good faith and without unnecessary publicity, deposit such certificate with a bank for collection, the cashier's knowledge so obtained will not release the guarantor, under a condition that the guaranty should be void if the promisee let or caused it to be known.
PIKE, J.
The plaintiff was not bound to exhaust his legal remedy against the company before bringing suit against the defendant. He was only bound to take such steps as were necessary to establish their default. Bank v. Sinclair, 60 N.H. 100, 106-109; McDonald v. Fernald, 68 N.H. 171. Such default was established when, after the principal became payable, the company failed to redeem on presentment of the certificate through the bank.
The present value of the certificate was immaterial, and testimony regarding it was properly excluded.
As the guaranty was written upon the certificate, it would necessarily become known to any one having possession of the certificate. The defence relied upon apparently was that, in view of this fact, the delivery of the certificate to the bank for collection rendered the guaranty void. It was not alleged that the plaintiff let or caused the guaranty to be known in any other way, nor that the bank unnecessarily spread the information. Such being the course of the trial, if testimony that knowledge of the guaranty was abroad was competent, its exclusion was harmless error under the circumstances.
In order that the company might redeem the certificate, it was necessary that it should be presented at their home office in Minnesota. No provision was made as to how it should be transmitted for presentment, and in the absence thereof it must be assumed that the parties understood it was to be by one of the ways usually adopted for such a purpose. Such a way appears to have been employed by the plaintiff, for it is a matter of common knowledge that securities payable at a distant place are usually collected through the medium of banks. The instruction that "if the plaintiff acted in good faith and without unnecessary publicity in depositing the certificate for collection through the bank, the cashier's knowledge of the guaranty so obtained would not relieve or release the defendant," was correct.
Exceptions overruled.
BLODGETT, J., did not sit: the others concurred.