Case Name: Birdsall v. Heacock
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1877-12
Citations: 32 Ohio St. 177
Docket Number: 
Parties: Birdsall v. Heacock.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 32
Pages: 177–184

Head Matter:
Birdsall v. Heacock.
1. A letter addressed to a lumber merchant in the following language r “Please send my son the lumber he asks for, and it will be all right,” is a guaranty that the lumber sold and delivered to the son, at the time-of its presentation, will be paid for.
2. But such guaranty is not continuing, so as to make the guarantor liable' for lumber subsequently purchased by the son from the same merchant. And payments afterward made by the principal, on account, will be applied in satisfaction of the first purchase, and consequent discharge of the guarantor’s liability.
Error to the Court of Common Pleas of Stark county. Reserved in the district court.
The original action was brought by plaintiff in error, in the Court of Common Pleas of Stark county, against one T.. C. Heacock, as principal debtor, and the defendant in error, as guarantor, seeking to recover a balance remaining due on an account for lumber sold and delivered by plaintiff’s firm to the said T. C. Iieacoek. The first items of the account bore date May 11, 1868, and were of the value of $226. Then follow sundry items for lumber delivered at different dates, extending down to January, 1869, and amounting in the aggregate to $2,962. Credits are given for payments, at sundry times, to the amount of $2,522. The court rendered judgment against T. C. Heacock for the balance appearing, to be due on plaintiff’s account. But, as to the cause of action stated in the petition against the present defendant, he demurred, on the ground that the facts stated did not constitute a cause of action against him; and on this demurrer judgment was rendered imhis favor.
To reverse this judgment on the demurrer, the plaintiff filed his petition in error in the district court, where the question of error was reserved for the decision of the supreme court.
That part of the petition which states the complaint against the present defendant, was as follows:
“And the plaintiff further says that in consideration that the firm of E. Ii. Potter would sell to said T. 0. Heacock lumber at his request, such as he would need in the business of a builder and lumber merchant; which business said.Heacock was about to engage in at the time he commenced purchasing lumber of said firm; the said Edwin Heacock did promise and guarantee in writing to said firm, that he would be accountable to said firm for whatever lumber said firm might sell to said T. 0. Heacok in his said business and make it all right, a copy of which guaranty is here given as a part hereof:
“Alliance, May 11, 1868.
“ E. H. Potter : Please send my son the lumber he asks for and it will be all right. I had to get him to write this as I was kicked with a horse one week ago on the arm and can not more than write my name if that.
“ Signed, Edwin Heacock.”
That said T. 0. Heacock is the son of Edwin Heacock, •and at the time of writing said guaranty and the commencement of dealing between said firm and him in said .account, the said T. C. Heacock was about to engage in the business of building houses and keeping a lumber-yard for the sale of lumber of all kinds, in the village of Alliance, in said county of Stark, and had no capital or credit of his •own. That he expected to carry on said business through several seasons, all of which was known to the said E. H. Potter and to said Edwin Heacock, and in order to give him, said T. C. Heacock, such credit from the said firm as he might desire in his said business, said Edwin Heacock executed said letter of guaranty and delivered it to his son, T. G. Heacock, who is the son mentioned therein, for the purpose of its being delivered to the firm of E. H. Potter, as a guaranty to them, and to procure credit for his ■son, and it was signed and executed by said Edwin Hea•eoelc, on or about May 11, 1868, and produced to said firm and delivered to it by said T. C. Heacock when he first ap plied to them to buy lumber. And induced by said letter, .and in faith of said promise and guaranty which was then delivered to said firm in the way of his business as such builder and keeper of a lumber-yard, and for reasonable prices, and on reasonable terms, agreed upon between said firm and said T. C. Heacock, said firm sold lumber to said T. C. Heacock, at different times, as shown in the foregoing account, for the purpose of enabling him to carry on his said business, in all amounting to the sum of $2,962.51, up to September 15,1871, on which the sum of $2,522.78 has been paid, as aforesaid, and the credit and time of payment of the said lumber by said Heacock to said firm has long since expired, and yet said T. C. Heacock has not, nor has said Edwin Heacock, paid said sum yet due, nor any part thereof. And of all of said premises said Edwin Heacock had frequent notice, and yet he refuses to pay the said firm, and to this partner, as surviving partner thereof, the said sum so due, or any part thereof, although often requested so to do.
Joseph Parker, for plaintiff' in error:
The facts stated show that if the writing of Edwin Heacock is of any force, it is au absolute guaranty as soon as acted upon, without special notice of its acceptance. Powers and Waightman v. Bumerantz, 12 Ohio St. 273.
The facts being admitted by the demurrer, I think two questions only arise:
First. Is the instrument a guaranty at all?
Second. Is it a continuing guaranty, binding Edwin Heacock for any balance on account that his son may owe to E. H. Potter in the line of business contemplated ?
The weight of recent decisions in England and in this country establishes the following rules for the construction of guaranties :
1. They are governed by the same rules of construction as other contracts.
2. They are most strongly construed against the guarantor, and there is a presumption in favor of validity.
3. The court must give effect to the intention of the-pai’ties.
4. To arrive at the intention of the parties the circum-' stances under which, and the purposes for which, the contract was made may be proved, and must be kept in view in its construction. Crist v. Burlingame, 62 Barb. (N. Y.), 35; De Colyar on Guaranties, 214; 2 Parsons on Contracts, 500; Salmon Falls Co. v. Portsmouth Co., 46 N. H. 249.
5. The court must look at the surrounding cii’eumstancesin the construction of guaranties, and if the circumstances attending the giving of the instrument show that the actual intention of the guarantee to ask, and the guarantor to give, a guaranty which should operate as a continuing-assistance to the guarantee in a business, then, although the language in the writing is capable of a more restricted operation, the coux'twill give effect to the proved intention, and construe the contract as continuing, if its terms will admit it. 1 Law and Equity, 236; 10 Add. & E. 309; 10 Eng. C. L. 764; 5 Conn. 149; 3 Kernan, 232; 23 Eng. C. L. 401; 8 Johns (N. Y.), 119; 24 Wend. 82; 3 Denio, 512; 2 Am. R. 485; 5 Allen, 47.
Construing this writing in the light of the rules laid down, Edwin Heaeock meant to bind himself to pay any balance owing to the plaintiff by T. C. Heacock. Sickle v. Marsh, 44 How. 91; De Colyar on Guaranties, 240, 244, 245, 246, 247, 248; Boehm v. Murphy, 40 Mo. 57.
James Amerman, for defendant in error :
The liability of Edwin Heaeock must be gathered from the entire instrument written by him. It can not be forced upon him by proof or allegation aliunde the instrument.
What he intended must appear in writing because of the statute of frauds. Bushnell v. Bishop, 28 Ill. 204; Russell v. Clark, 7 Cranch, 62.
If the instrument is a sufficient aud legal guaranty, then, as such guaranty, it became exhausted by the first purchase under it. Dixon v. Frusee, 1 E. D. Smith, 30; Kay v. Groves, 6 Bing. 276; Harden v. Crane, 1 Laws, 181; Anderson v. Bleakly, 2 Watts & Serg. 237; Whitney v. Groot, 24 Wend. 82; Gard v. Stephens, 12 Mich. 292; 119 Mass. 435.

Opinion:
Scott, J.
Counsel for defendant in error claims that the instrument of writing upon which the petition in this case 'bases the liability of their client is not a guaranty of any kind. The petition, however, avers that it was acted upon .as a guaranty by the plaintiff's firm ; and from its terms we think it was intended by the writer that it should be so understood and acted on. It is not a representation as to the solvency or pecuniary circumstances of the party .about to ask credit from the plaintiff; but a request or direction that such credit should be given, and an unqualified assurance that the doing so would " be all right." The •sale and delivery which it directs or requests could only be made " all right " to the plaintiff by punctual payment, according to the terms of the sale. And we think the writing imports a guaranty of such payment. It was an •absolute assurance that the lumber which might be delivered to defendant's son, at his request, would be paid for.
But, within a week from the date of this guaranty, the •son obtained from the plaintiff lumber to the value of $226, on the faith of this guaranty, this being the full amount that he then asked for; and this amount he has since fully paid for. The only question arising on the demurrer to plaintiff's petition is, whether the guaranty in questio» is a continuing one, referable by its terms to other and subsequent sales of lumber,- made by plaintiff to defendant's sou, or whether its terms limit it to a single transaction.
We see no good reason why contracts of warranty should not be construed by the rules applicable to the construction of contracts generally. As contracts by which the guarantor assumes the position of a surety, and becomes responsible for the default of his principal, there would seem to be good reason for not holding him liable beyond the express terms of his agreement; and, on the other hand, there can be no good reason why a guarantor, who-procures a credit to be given which would have otherwise been refused, should not be held liable to the full extent warranted by the terms of the guaranty. In all written contracts, we think the language of the parties should be-so construed as to give effect to their clearly ascertained intention. And, as au additional rule, we think it well settled that all contracts, in which the terms are in any respect equivocal, should be read in the light of the circumstances under which they were entered into. This is to be done, not for the purpose of varying the intention of the parties, as disclosed by the writing, but of ascertaining what the parties, in fact, meant by the doubtful language employed for the expression of their intention. The language of the guaranty in this case is, " Please send my son the lumber he asks for, and it will be all right." There is no express limit to the quantity of lumber to be-furnished. This is left to depend solely on the pleasure of the purchaser. But it may well admit of doubt whether it contemplates more than a single purchase. Its language-is in the present tense. And it might therefore be held that this language embraces only such lumber as the guarantor's son should ask for, upon the presentation of the-guaranty. And as it contains no express reference to future transactions, such, we think, should be its construction, if read without regard to the circumstances under which it was written, or acted upon. And in support of such a construction, it is certain that many authorities, both English and American, might be cited. In order, therefore, to extend the meaning of this guaranty beyond the necessary import of its terms, the petition under consideration states that it was written and acted upon under certain circumstances which are supposed to give its language a meaning that it would not otherwise import. But, looking to all the circumstances stated in the petition, we think they are-not sufficient to give the guaranty relied on a more extended meaning than its terms would ordinarily import. It is-averred that the guarator knew that his son was about en gaging in the lumber business, which he expected to carry on for several seasons. But the writing contains no reference to that fact; and it is not averred that the son expected or intended to make a series of purchases of lumber from the plaintiff, and that this fact was known to the father. It is also alleged that the plaintiff', from time to time, furnished to the son the different bills of lumber stated in their account, in reliance upon this guaranty. But it is not alleged that this fact was, during this time, known to the father, or acquiesced in by him. Had such been the fact, it would be a practical construction of his contract, by the guarantor, which we might well adopt and enforce.
Looking, then, to the language of the guaranty, its operative words are : " Send my son the lumber he asks for, and it will be all right." This language clearly imports that the father knew that his son was desirous of procuring some lumber from the plaintiff upon credit. He clearly intended to procure such credit for his son by guaranteeing payment for such lumber as his son should ask for and obtain upon the presentation of the writing to the plaintiff'. And we think it does not clearly import more than this. The guaranty is co-extensive with the order or direction given, and this order was fully complied with when the plaintiff, upon its presentation, sold and delivered to the son the lumber which he then asked for.
Many cases might be cited in which similar language has been confined in its interpretation to a single transaction. Whitney v. Groot, 24 Wend. 82; Gard v. Stevens, 12 Mich. 292; White v. Reed, 15 Conn. 457; Anderson v. Blakely, 2 W. & S. 237.
On the other hand, cases are not wanting in which guaranties no more comprehensive in their form of expression have, under the circumstances of the case, been construed as continuing.
Hpon this subject, it has been well said, that " the chief difficulty lies in determining what interpretation should be put on a guaranty which is so worded that it may either extend to a series of sales or advances, or be limited to the first. The better opinion would seem to be, that such an instrument should be confined to the immediate transaction, unless the language of the promise is sufficiently broad to show that it was meant to reach beyond the present, and render the guarantor answerable for future credits. The tendency of decision in this country has, accordingly, been against construing guaranties as continuing, unless the intention of the parties is so clearly manifested as not to admit of a reasonable doubt." 2 Am. Lead. Cas. 141; citing Congdon v. Read, 7 R. I. 576; Gold v. Stevens, 12 Mich. 292; White v. Reed, 15 Conn. 457; Whitney v. Groot, 24 Wend. 82; Webb v. Dickerson, 11 Ib. 62; Aldrich v. Higgins, 16 S. & R. 213; Anderson v. Blakley, 2 W. & S. 237.
We are of opiniou that the judgment of the court of common pleas should be affirmed.
Judgment affirmed.