Court Opinion

ID: 7110617
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:25:57.748258+00
Date Added: 2024-06-11T16:13:15.066765
License: Public Domain

PER CuRiAM.
In a petition for rehearing counsel for appellant urged that some of the objections argued by him were not noticed by the court in the opinion. Thereupon a rehearing was granted, and the case has been resubmitted, with additional arguments on each side. We still adhere to the views expressed in the first opinion, but deem it proper to consider some further contentions of appellant.
*5754. accommoda-indorsement: future ad-newais. *574The note indorsed by W. E. Mason and delivered by him to the plaintiff was not indorsed in any proper sense for the accommodation of the plaintiff, but for the accommodation of the Mason Hand Lathe Company. It was *575deposited “as security for any obligation that may be due or that may hereafter become due” by the Ma-Hand Lathe Company to plaintiff. We ._ may concede for the purpose of this ease that \\L E. Mason, by means of this transfer, and to the extent of the amount of this note, became a guarantor for the Mason Hand Lathe Company; but' the security thus furnished was the note bearing his indorsement, and imposing on him the liability implied from such indorsement. As to any claim that the note was negotiated through W. E. Mason merely as a pretense, and that it and the chattel mortgage given to secure it were accepted as security with the understanding that W. E. Mason was not to become personally liable, it is enough to say that there is no evidence of any agreement that W. E. Mason should not be bound by his indorsement, and that plaintiff consistently claimed from first to last in its correspondence with W. E. Mason that he was personally liable on his indorsement, while, on the other hand, such liability was repeatedly recognized by him. W. E. Mason was not personally liable to plaintiff to any extent or in any manner, unless he was liable on this indorsement. Appellant’s counsel argues that the security was only for indebtedness then existing and already due or afterwards to become due. But reading the letter of W. E. Mason in the light of all the circumstances, we cannot so interpret it. Both J. E. Mason and W. E. Mason testify that the security note and mortgage were deposited with the plaintiff for the purpose of securing future credit and it clearly appears that the sum of $1,500 was loaned by plaintiff to the Mason Hand Lathe Company after the security note was deposited. At the time such note was deposited the indebtedness was only on two notes for $700 and $500, respectively, both secured by mortgages on real estate; und the indebtedness on these two notes must have been largely reduced by application of proceeds of the mort*576gaged, real estate, for a very large part of the judgment oí $1,650 rendered against W. E. Mason is for balance of the $1,500 note not satisfied out of the chattel property. If the object was only to guarantee the payment of these two. notes for the aggregate sum of $1,200, why should W. E.. Mason have indorsed and deposited with plaintiff a note' for $3,000, which was drawn for the express purpose of using it in this way? It is clear to us from the testimony of W. E. Mason himself that his intention was to secure-future advances, as well as indebtedness then existing,, and it is equally clear that plaintiff accepted the security-note with this understanding. The language of W. E.. Mason’s letter must be interpreted in the light of the construction which he and plaintiff placed upon it.
Further, it is urged that all the obligations of the-Mason Hand Lathe Company to plaintiff, for which plaintiff seeks to hold W. E. Mason as indorser, are renewals,, executed after the security note was accepted; and that, as W. E. Mason was practically a guarantor only, he was-released by the extension of time given by such renewals. But the agreement was for a continuing guaranty, and by its terms it was applicable to new indebtedness. Therefore, renewals were covered as fully as existing indebtedness or indebtedness newly created. This is the construction which all the parties put on the transaction. W. E. Mason fully acknowledged his liability long after he must have known that any obligations of the Mason Hand Lathe Company to plaintiff were renewals executed after the security note had been transferred by him to plaintiff.
5 inability of Srti(2orf:ac-ceptance. The last contention of counsel to which we need refer is that W. E. Mason was not bound for any sums advanced by plaintiff to the Mason Hand Lathe Company after the transfer of the security note, because he was not.notified of the acceptance of his guaranty ag ^ a(Jvancement. Jfc is true that a mere offer or proposal of guaranty requires notice of *577accetpance. German Savings Bank v. Drake Roofing Co., 112 Iowa, 184. But here was an absolute guaranty to a limited amount. . The security note was transferred to-plaintiff with authority to make advances upon the security thus given. When advances were made upon the author^' expressly given, the riglit of the plaintiff to hold the security therefor became perfect. It may be said here,, •as was said by us in German Savings Bank v. Drake Roofing Co., supra: “The amount of defendants’(guarantors’) liability is fixed by the instrument itself,, and the promise is such that notice of advancement made from time to time may well be said to have been waived.” — Aeeikmed.