Case ID: wis_123/html/0364-01.html
Source: Caselaw Access Project
Author: {"author": "MaRShaíl, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Haney School Furniture Company, Appellant, vs. Medary, Respondent.
    
      November 21
    
    December 13, 1904.
    
    
      Contracts: Bond securing notes: Construction: Renewals.
    
    In an action against the surety on a bond securing certain promissory notes of the principal, a provision of the bond, that “said notes may be from time to time renewed during” the term of the bond, is construed to mean that the obligee may take renewals without affecting the liability of the surety, and not as securing to the principal the privilege to renew from time to time as notes fell due during the term of the bond.
    Appeal from a judgment of tbe circuit court for La •Crosse comity: J. J. Pbuit, Circuit Judge.
    
    
      Reversed.
    
    Action by tbe obligee to recover of tbe surety for breach of ■a bond, tbe material portions of wbicb are as follows:
    “Know all men by these presents, That we, C. P. Lockwood and J. 8. Medary are bound unto tbe Ilaney School Furniture Go. in tbe penal sum of two thousand dollars, for payment of wbicb ... we bind ourselves . . .
    “Sealed with our seals and dated this 16th day of May, 1900.
    . “Whereas, — the said Lockwood has been for some time and now is indebted to said Furniture Company upon notes ivhick have been from time to time renewed and upon open account, . . . and said Medary has been surety for said Lockwood to tbe extent of two thousand dollars under a bond ■covering tbe transactions of one year subsequent to May 16th, 1899, and said Lockwood has been and is continuing to make payments on such indebtedness, and said Company is willing to renew and carry said notes in consideration of this bond, .which is given in substitution and exchange for tbe aforesaid bond.
    “Now therefore, tbe condition of this obligation is such that if within one year, or at tbe expiration of any renewal notes given during tbe year said Lockwood shall pay said notes and all renewals therefor, then this obligation shall be void.
    
      “It is agreed that the said notes may be from time to time-renewed during the said year and for the period customary in bankable paper, and that the liability of the surety hereunder shall in no event exceed the sum of two thousand dollars.
    “C. E. Lqoewood. [Seal.]
    “J. S. Medary. [Seal.]”
    The breach alleged was that a renewal of the notes mentioned occurred March 11, 1901, all being put in oile note-for $2,538.35, due May 16, 1901; that neither the original notes nor any of the renewals were paid within one year from the date of the bond or thereafter, and that Jitne 26th after the maturity of the last renewal mentioned, and after the maturity of the bond, due demand was made for payment by the surety of the sum of $2,000, and that the same was refused.
    The defendant pleaded that plaintiff breached the bond,, in that when the note of March 11, -1901, became due it refused, upon due request therefor, to renew the same. The evidence was to the effect that there was such refusal. A verdict was directed in favor of the defendant and judgment was rendered accordingly.
    For the appellant there was a brief by McGonnell &■ Schweizer, attorneys, and Taggart, Denison & Wilson, of counsel, and oral argument by J. D.'McGonnell and A. G. Denison.
    
    For the respondent there was a brief by Woodward & Lees, and oral argument by G. M. Woodward.
    
   MaRShaíl, J.

The only question for decision is: Did the provision at the foot of the bond that “said notes may be from time to time renewed during the said year” secure to- the maker thereof the privilege to renew from time to time as notes fell due,.during one year, or was its purpose to enable the obligee to take renewals without affecting the liability of "the surety? The court below took the former view. Very little light can be shed on the subject as to which view is Correct by referring to the authorities, or by discussion. None but very familiar rules for construction furnish aid in the matter. The general features of the bond indicate pretty clearly an intention that the renewals should not be taken, due after one year from its date. If such renewals had been taken respondent would very likely have claimed, and with 'reasonable ground therefor, a fatal breach of the bond. It seems pretty clear that the1 sole consideration for the instrument was the first renewal of the notes. The words “renew and carry said notes” refer to one renewal only. While it was contemplated that there might be re-renewals, it being said in effect, that payment of renewals should extinguish the bond, no obligation for such renewals is mentioned in the consideration. The plain purpose at that point seems to have been that in case of renewals, payment thereof should have the same effect as the payment of the original paper. The language which follows: “It is agreed that the notes may be from time to time renewed during the said year,” etc., “and that the liability of the surety hereunder shall in no event exceed two thousand dollars,” does not seem to have been used to secure to the principal obligor an advantage, but to give a'carefully guarded privilege to the obligee, as between it and the surety. It,says to the latter, you may favor the principal obligee by renewals within one year, without releasing the liability of the surety to you, it being understood, however, that in no event shall the latter’s liability exceed two thousand dollars. If that is the correct construction of the instrument, and we are constrained to hold that it is, appellant was not bound to renew the notes when requested to do so May 10, 1901, and the refusal to do so did not release the surety.

It seems that the learned trial court may have been persuaded to adopt a contrary view to the conclusion we have readied by applying tbe rule that in case of uncertainty as to which of two reasonable meanings of an instrument affecting the liability of the surety is the proper one, that one should be adopted which is most favorable to him. We are unable to discover in the situation before us such uncertainty. We note that the learned counsel for respondent gives much significance to the words “renew and carry said notes in consideration of this bond,” as suggesting renewals from time to time during the year. It was so easy .to use language plainly indicating that, if such was the intention, the omission to use it persuades strongly to the conclusion that the willingness in prcesenti to renew refers to one renewal, and that the word “carry” reférs to the original note, the idea being that whether the indebtedness remained evidenced ..by the latter or by renewals, the obligee was willing to carry the same for one year. While plainly appellant obligates itself to renew the notes existing at the date of the bond, if desired, the surety just as plainly bound himself for payment of the indebtedness evidenced by; such notes, whether the same remained evidenced thereby or renewals thereof, if they were not paid by the maker within one year. The words “pay and discharge the aforesaid notes,” (meaning those existing at the time the bond was made) “and all renewals therefor,” make that plain. So “renewals”' at that point refer to presently existing notes, not re-renewals. Otherwise the added clause providing for such renewals would be merely surplusage. A construction of an instrument which treats language apparently deliberately incorporated therein in regard to an important matter as useless, is not to be adopted if it can reasonábly be avoided.

By the Court. — The judgment of the circuit court is reversed and the cause remanded for a new trial.