Case ID: ny-st-rep_71/html/0202-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Challenge Corn-Planter Company, Resp’t, v. Frank Diel, App’lt.
    
      (Supreme Court, General Term, Fourth Department,
    
    
      Filed December 26, 1895.)
    
    Guaranty—Release-Modification of contract.
    The guarantor of a contract for the payment of goods at a specified date is released where, by a new arrangement between vendor and purchaser before the delivery of the goods, the time for making payment is extended.
    Appeal from a judgment entered on a verdict directed by the -court in favor of plaintiff.
    
      Goodelle & Nottingham, for app’lt;
    
      Jenney & Marshall, for resp’t.
   Per Curiam.

In February, 1892, an agent of the plaintiff -went to the store of the defendant, to sell him refrigerators manufactured by the plaintiff; and an arrangement was entered into between them by which the defendant was to have the sale of the plaintiff’s refrigerators in the city of Syracuse for the year 1892, and the defendant was to give the plaintiff an order for á car load •of refrigerators. After this arrangement was consummated, the •defendant suggested to the plaintiff’s agent that he help him by going to and selling S. M. Fort refrigerators for his account. The agent went, and obtained an order directed to the plaintiff, which, so far as material, was:

“ Please send me on or about May 1, 1892, the below refs, and chests, the No. 8 to cost $7.00 each, net; all others at a discount of 45 per cent., your 1892 list. Terms, payable July 1st, or note, or 2 per cent. May 10th, ’92; freight allowed to Syracuse, N. Y.
“(Signed) S. M. Fort.”

The order was delivered to the defendant, who entered it, and •wrote the following, which was directed to the plaintiff:

“Please enter my order for one carload of Challenge refrigerators, at fifty and five per cent. List delivered. Terms, May 1st sixty days, or two per cent, cash ten days. And the inclosed order from S. M. Fort to apply on the car load, you to charge and bill the refrigerators direct to him, and collect pay for same .as specified in the order, and to credit with' me with the difference in amt. between forty-five per cent, and fifty and five per cent, and I to guaranty the payment of same. Will send specifications for ¡balance of car load in time to ship with Fort’s order.
“ [Signed] Frank Diel.”

The defendant then delivered the Fort order and his own to the agent, who mailed them to the plaintiff. On March 4th, the plaintiff wrote the defendant:

‘‘ Tour order accepted, and will go forward as per jour order. Many thanks.’

On March 21st, a bill of the refrigerators was sent to Fort, which, so far as material, was :

“ Challenge Corn-Planter Co. * * * Sold to S. M. Fort, Syracuse, N. Y. Due July 1st, 1892. Interest after due. (Then follows the list of refrigerators and prices.) Payment on above guaranteed by Frank Diel, Syracuse, N. Y.

On the 26th of the same month, Fort wrote the plaintiff :

“I have to-day received your invoice of March 21st, amounting to $409.73. I am somewhat surprised at this, as, according to order given your agent, it was conditioned, and so accepted in writing by him ; that was, that, if you accepted my order, you were to advise me by return mail. After waiting and not hearing from you, I concluded you had decided not to accept, and so within the past few days have placed my order with another house. In view of the facts, the goods must remain at the depot at your disposal, or at least until I hear from you."

It seems that, on the 29th of March, Fort's letter was sent to the defendant, after which he wrote the plaintiff:

“Yours of 29th, also Mr. Fort’s letter, received this A. M., and I am at loss to know why you should send his letter to me, as I have nothing to do with the transaction. Your man made the sale, and he must have known what he was about; and if you have Mr. Fort’s order and signed by him, I would make him take the goods. As far as his having placed his order with another house is all bosh, for I know better. He is trying to crawl out, :and thinks he has ordered too many. I shall take mine when they arrive, and will have nothing to do with those consigned to Mr. Fort.”

On April 5th, the defendant’s son,,who was in charge of his business, wrote plaintiff:

“ The refrigerators came this A. m., and as Mr. Fort’s refrigerators came first, and near the door, I went over, and told him they were there, and to get them, so we could get ours out; and, to my astonishment, he replied that he would not touch them, and absolutely refused to receive or have anything to do with them, •claiming that you violated your agreement with him in selling us the goods. Mr. Diel is out of town, and won’t be home until Saturday night; and, as I am not familar with the particulars of the case, I would not take his lot or pay the freight on them. They are laying over in the freight yard, and I won’t touch them until I hear from you. So please advise me on receipt of this, by wire, what to do in the matter, or what course you intend to pursue with Mr. Fort. Awaiting your reply, I am, * *

On April 7th, the plaintiff telegraphed the defendant:

“ Beceive the refrigerators, and draw on us for freight.”

On the same day it wrote:

uThis refrigerator transaction is an unknown quantity to us. We only know Mr. Neal, of N. Y., sent us the -order, and we notified the party upon receipt of same ; further we know not. We wire you to receive, pay freight, and draw on us for freight. If you can sell them all right; if not, will order away. One thing-sure: Whatever is honorable or fair on the part of our Co., between you and us, will be carried out to the letter. Matters not what-Mr. Neal or Mr. Fort has to say in the matter. Hoping this, is satisfactory, we remain. * * * ”

On the 12th of April, Fort sent the plaintiff this letter:

. “In the latter part of March, we wrote to .you about the refrigerators named in an invoice, dated the 21st of March. We have not had any response from you on the subject, and would be» glad of a reply by first mail. ”

On April 14th, the plaintiff replied:

“ Yours of the 12th inst. at hand. It seems our correspondence- ■ is quite unsuccessful. First, upon receipt of you order here (given Mr. Neal, of N. Y.), we acknowledged receipt the same day. Not hearing anything from, never dreamed you did not receive our letter of acknowledgment, of course, we shipped the goods. Upon receipt of invoice, we read your letter saying you would not receive them, as you had not received notice from us that we accepted the order, with the statement you did not understand,— that others were to handle the same line in Syracuse. This is a thunderbolt to us, as we were ignorant of any talk, promises ; in fact, all we knew was the order to ship so and so. Upon receipt of same, w6 wired our old customer, Frank Diel, to pay freight, receive them subject to our order; and there they are, as we suppose, not knowing anything to the contrary. We are very sorry, as it must be annoying to you, as well as expensive to us. Of course, we can dispose of the refrigerators, but that does not restore the confidence between us that ought to exist. You understand, as a business man, that manufacturers’ and their customers’’ interests are mutual, and we endeavor to please our customers-rather than displease them. We aim to do so. We cannot read the hearts and minds of men, and we do not know what salesmen say to our customers ; but we do intend to deal fair and just, and we don’t make refrigerators enough to change us one inch» from doing the square thing to all. We would like to have you take-the goods, but if you cannot see your way clear, under the circumstances, we shall, of course, accept the situation as. it stands. If you wish and know who we are, ask Hy. Lacy, cashier ; he will tell you. Trusting explanation satisfactory, we remain, * *

On April 16th, Fort again wrote the plaintiff:

“Yours of the 14th inst. to hand, and must say that our correspondence has, at least, been unfortunate. Now, although I was not notified of the acceptance of my order, and. in consequence ordered other goods, yet, although it will almost double up my stock, T will take them, provided you will take the payment on them by note for half the amount dated July 1st, and note for the balance in a reasonable time thereafter. The goods-are now at the depot warehouse, and, if you agree to my proposition, you will please wire me, at my expense.”

In response to this, the plaintiff, on April 18th, wired Fort:

“We accept of your proposition.”

—And on the same day wrote :

“ This is to confirm my message to-day, ‘ We accept of your proposition.’ We hope same will be satisfactory to you.”

On the 14th of July, the plaintiff sent a blank note to Fort, accompanied by this letter:

“ In reply to yours of 12th. Please fill out, sign, and return to us, the inclosed blank note, making it due at a time you can conveniently pay it.”

On the 14th of Sepiember, 1892, the defendant sent the plaintiff his check for $236, to balance the account for the refrigerators purchased by him, and in the account was included $55.76, for commission on the refrigerators sold to Fort. On September 16th the plaintiff wrote the defendant:

“ Yours of the 14th inst., inclosing cash $236.00, in full of account, is received, with thanks. Soliciting your valued future orders, were are, * " .”

On February 23, 1893, the plaintiff wrote the defendant:

“We have not as yet been able to get a settlement with S. M. Fort, of your place. We have done everything we could in regard to the matter, and have waited as long as we can, and shall expect you to settle for this at once, as per contract. Let us hear from you.”

To this, the defendant, on March 4th, replied:

Yours of Feby. 23rd received, and, in reply, would say that I •am very much surprised at its contents,—that..,you should ask me to pay for Mr. Fort’s refrigerators, after my having written you, on March 31st, 1892, that I would have nothing whatever to do with them, and I refer you to my letter of that date, and I positively refuse to pay for them, and think it a great imposition and nerve •on your part to ask anything of the kind.”

Ón March 6, 1893, the plaintiff wrote:

“Yours of the 4th inst. at hand. We hold your guaranty for the acct., and we shall look to you for the payment of the acct. If we are forced to collect the acct. from you, we shall do so.”

The foregoing is a brief synopsis of the evidence so far as it is material to the questions involved on this appeal. The trial court held that the defendant’s letter of February 24, 1892, and the plaintiff’s acceptance, constituted a guaranty of the payment of the bill of goods sold to Fort; that, as a matter of law, the plaintiff was entitled to recover of the defendant the amount of such bill and interest; and directed a verdict accordingly.

The appellant challenges the correctness of this desicion, and insists that the contract resulting from Fort’s order and its acceptance was dissolved by a new and different one, or was at least so far modified or changed as to relieve the defendant from any liability upon his guaranty. Whatever controversy may have formerly existed in respect to the rule governing courts in the construction of guaranties, it now seems to be settled in this state that they should be construed according to the apparent intention of the parties. But, when the meaning is ascertained, the surety cannot be held liable beyond the precise terms of his contract. Bank v. Kaufman, 93 N. Y. 273, 281; Powers v. Clarke, 127 N. Y. 417, 424; 40 St. Rep. 196; McShane Co. v. Padian, 142 N. Y. 207, 210; 58 St. Rep. 651. Any alteration of a contract as to which a third person has become a guarantor or surety, without his consent, extinguishes his liability, irrespective of the question whether the alteration would work any injury to him or not. This is because the surety has never made the contract upon which he-is sought to be charged. People v. Vilas, 36 N. Y. 459; Paine v. Jones, 76 N. Y. 274, 278; Page v. Krekey, 137 id. 307, 314; 50 St. Rep. 650. Persons who are competent to make a. contract are-equally competent to waive or abandon it; and, where both concur in a waiver or abandonment, the contract is dissolved, and the-rights of each under it are at an end. Graves v. White, 87 N. Y. 463; McEachron v. Randles, 34 Barb. 301; Tayleur v. Wildin, L. R, 3 Exch. 303; Kay v. Groves, 6 Bing. 276. An agreement to-guaranty the payment by another for goods to be sold in the future, not founded upon any present consideration passing to the guarantor, until acted upon, imposes no obligation and creates no-liability of the guarantor, and is revocable by him at any time before it is acted upon. Jordan v. Dobbins, 122 Mass. 168; Offord v. Davies, 12 C. B. (N. S.) 748; Bank v. Strever, 18 N. Y. 502, 514: Hunt v. Roberts, 45 id. 691, 696.

When we consider the facts in this case, and apply to them these principles, we think it is obvious that the court erred in holding, as a matter of law, that the plaintiff was entitled to the recovery directed. An examination of the correspondence between the parties tends to show that there was a waiver or abandonment, of the original contract between the plaintiff and Fort; but, be-that as it may, that it was altered there can be no doubt. The undisputed evidence shows that, under the original contract between the plaintiff and Fort, the terms of payment were: “Payable July 1st, or note, or two per cent. May 10th, 1892.” Under-that contract, Fort refused to take the goods, upon the ground that he had received no notice from the plaintiff of the acceptance of his order. Subsequently, he proposed to the plaintiff that he would take them if the plaintiff would “ take the payment on them by note for one-half the amount, dated July 1st, and note for the-balance in a reasonable time thereafter. This proposition was accepted by the plaintiff. Construing Fort’s original order as favorable to the plaintiff as possible, Fort was required by it to pay the amount July 1st, or then give his note therefor. By the subsequent agreement, he was required to give his note for only one-half of the purchase price at that time, and for the remainder he was to give his note in a reasonable time thereafter. Eence there was an essential change in the time of payment; which might materially affect the defendant. The defendant might have been willing to guaranty payment under the first contract, and unwilling to guaranty it under the second. His contract with the plaintiff was to guaranty the payment under the precise terms of the original order. When a new agreement was made, the defendant; was not liable because he had never made any contract to guaranty the payment under the latter.

Judgment reversed, and a new trial granted, with costs to abide the event.