Court Opinion

ID: 9868699
Source: CourtListenerOpinion
Date Created: 2023-09-26 18:48:26.17865+00
Date Added: 2024-06-11T11:39:05.550095
License: Public Domain

On Appellants’ Motion for Rehearing.
Appellants contend that we erred in holding that the expressed consideration in the guaranty agreement was contractual, because the extension of further credit to defendants was at the will of plaintiff, and therefore the contract was lacking in mutual-, ity and unenforceable, citing 10 Tex. Jur. 163, § 96.
The stated principle of law is correct; and it may be conceded that there was no binding agreement on the part of plaintiff to extend credit to defendants and no binding agreement on the part of defendants to purchase from plaintiff, and that consequently guarantors had the right, independently of the revocation clause, to repudiate their guaranty agreement at any time prior to the actual extension of further credit. As pointed out in our original opinion, however, it was agreed in open court by all parties to the record that the unpaid balance of the account in suit accrued after the execution of the guaranty agreement. There was no repudiation of that agreement or revocation of their guaranty by guarantors prior to the time the entire account had accrued. The following quotation from the cited section in 10 Tex. Juris, states a generally accepted proposition of law: “The want of mutuality is eliminated where the party having the right to fix the quantity to be delivered does so before the other party has repudiated the contract.” The guaranty agreement expressly provided that it should “be construed as continuing until written revocation thereof is served by me or us by registered mail, addressed to the company at Akron, Ohio.” Whether the contract had any binding force at the time it was executed is unimportant; it was in any event a continuing obligation until revoked, even though conditioned upon the extension of further credit. It can hardly be seriously questioned that the agreement was operative at least to the extent of such credit as was thereafter and prior to revocation extended. The extension of such credit we think clearly
*581was a contractual obligation, even though conditioned upon the will both of plaintiff and defendants; and the rule of evidence applied in our original opinion is applicable regardless of the binding effect of the agreement up to the time of the actual extension of credit thereunder.'
Motion for rehearing is overruled.
Overruled.
BAUGH, J., not sitting.