Court Opinion

ID: 6694665
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:46:38.76684+00
Date Added: 2024-06-11T11:54:36.201816
License: Public Domain

MONTGOMERY, J.,
dissenting in part. Roberts Brothers of Buncombe Oounty, N. C., were in 1899 indebted to the plaintiffs of Knoxville, Tenn., in the sum of $1,742.62 for *425goods sold to them, and being nnable to make further purchases on credit without security, procured their uncle, the defendant, to sign and deliver a guaranty in the following-words: “Knoxville, Tenn., April 8, 1899. I hereby guarantee to Oowan, McGlung & Oo. any debts which Eoberts Brothers now owe or may owe in the future to the extent of two thousand dollars. This obligation to remain in full force until the debt now due Oowan, McOlung & Oo. is fully discharged and this agreement annulled in writing.” Afterwards the plaintiffs sold and delivered to Eoberts Brothers at different times, goods and wares to the value of $475.45.
This action was brought to recover the two thousand dollars, the amount named in the guaranty. No notice was given by the plaintiffs to the defendant of their acceptance of the guaranty.
The guaranty upon its face is divisible into two parts: one branch seems to be an obligation for the payment of a debt already existing and du,e by the principals to the guarantees, the plaintiffs, and the other branch is in the nature of a security for a debt to be contracted in the future by the principals with the plaintiffs. By the terms of the guaranty in respect to the debt already due, the obligation appears to be an absolute guaranty, and if there was a consideration to support it, the defendant is liable for its payment.
There was in fact such a consideration, for the plaintiffs, after the execution of the guaranty, sold and delivered to the principals goods and merchandise of the value of $475.45, and the defendant testified on the trial that the guaranty was made in order that the debt already due might be secured, and that further fresh purchases of goods might be added to the stock of the principals then on hand. It was not necessary that the defendant should have been *426benefited in order to raise a consideration for the guaranty on the part of the guarantor. Any advantage accruing to, or any consideration moving toward, the principals from the plaintiffs was sufficient in law to make the defendant liable on the first branch of his guaranty.
As to the second branch of the guaranty, that is, the guaranty of the amount of the debt to be contracted in the future by the principals, a notice of acceptance by the guarantees, the plaintiffs, was necessary. That branch of the guaranty was not absolute, and in Gregory v. Bullock, 120 N. C., 260, the Court said: “The answer is that the alleged guarantee gave no notice of his acceptance within a reasonable time.” In Adams v. Jones, 12 Peters, 213, Mr. Justice Story said: ‘Notice is necessary to be given the guarantor that the person giving credit has accepted or acted upon the guaranty, and given credit on the faith of it. This is no longer an open question in this Court.”
In the case of Clune v. Ford, 62 N. Y., 479, cited in the argument here, the guaranty was in these words: “Dear Sir: We hereby agree to guaranty the expenses of the members of the Gaelic'Athletic Association to the sum of $650 (six hundred and fifty dollars), or the amount due under that figure.” The guarantee was the proprietor of a hotel in New York City at which the members of the Association were boarding, and were in arrears for board for the sum of $475.' After the delivery of the guaranty they incurred the further expense of $175. The question- of notice of acceptance by the guarantee was not raised, the matter of consideration was the only point in the case, and the Court held that the incurring of the $175 expense for the board, after the guaranty was given, was a sufficient consideration for the amount due in the past. In the case of Paige v. Parker, 74 Mass., 211, cited on the argument here, the Court held that the guaranty was an absolute one, and *427therefore that notice was not necessary. The paper-writing in that case guaranteed the prompt payment at maturity of any amount that might be due by the principal for goods, wares and merchandise to be sold by the guarantee to the amount of $500. The Court in that case said that “however this may be, we are of opinion that the defendant in this case had notice that his guaranty was accepted. An absolute guaranty was writen by Blodgett & Co. in their store and for their benefit. The defendant signed it there and left it with them as a complete contract, and they retained it. This was an acceptance by them, for which he must be held to have notice.”
In the case before us, the plaintiffs contended that the guaranty was made at the request of the guarantee, and therefore that no notice of acceptance was necessary. But there was no evidence’ of that fact. The guaranty, it is true, was in the handwriting of the plaintiffs, but it was brought to the defendant by one of the firm of Eoberts Brothers, but he made no statement at the time or at any other time that the plaintiffs expected that the defendant singly and particularly would sign it. And besides, the defendant did not deliver it to the plaintiffs in person and leave it in their possession as a contract completed, as was the case in Paige v. Parker, supra. There was evidence offered on the trial going to show that the defendant executed the guaranty through a fraud practiced on him by one of the principals. But it was not shown that the plaintiffs had any notice of the fraud. Notwithstanding the fraud practiced on the defendant, he is liable on the first branch of the guaranty for the reason that the plaintiffs did not participate in the fraud or have knowledge of it. Bailes on Surety and Guarantor, p. 215.