Baskett Lumber & Mfg. Co. v. Gravlee

• Citation: 73 So. 291,15 Ala.App. 359
• Decision Date: 14 November 1916
• Docket Number: 6 Div. 57
• Court: Alabama Court of Appeals
• Parties: BASKETT LUMBER & MFG. CO. v. GRAVLEE et al.

73 So. 291

15 Ala.App. 359

BASKETT LUMBER & MFG. CO. v. GRAVLEE et al.

6 Div. 57

Court of Appeals of Alabama

November 14, 1916

Appeal from Circuit Court, Fayette County; Bernard Harwood, Judge.

Action by C.M. Gravlee and another against the Baskett Lumber &amp Manufacturing Company, for breach of a guaranty. Judgment for plaintiffs and defendant appeals. Affirmed.

The complaint alleges a contract between J.P Daniel and plaintiffs for the sale of certain timber therein described, upon certain lands therein described, together with all necessary rights, including all necessary rights of way for roads, tramroads, and all rights of way for all spurs for the removal of said timber, or any other timber owned by them. Said Daniel is to cut and remove said timber as rapidly as ordinary conditions will permit. Said logs cut shall be scaled every two weeks, and paid for when scaled, and no logs shall be scaled or removed otherwise except by agreement of the parties to this contract. Said Daniel or assigns is to pay for all timber as above specified, according to a fixed scale therein set out. The contract also contained a provision for the selection of disinterested parties to determine upon the grade of the logs in dispute in the event that the parties cannot agree upon the grade. A forfeiture was worked under the terms of the contract, in the event that Daniel should pay or refuse to be governed by the ruling of the referee so selected. The removal of the logs by Daniel without being scaled also worked a forfeiture against him. The right of removal of the timber was granted until January 1, 1915. The complaint then alleges that in April, 1914, the following contract was entered into between plaintiff and defendant:

Know all men by these presents that the undersigned, the Baskett Lumber & Manufacturing Company, a corporation, agrees to take up the timber cut or to be cut under the terms of the contract entered into by and between C.M. & G.W. Gravlee, and J.P. Daniel, executed and dated March 4, 1914, and said company further agrees to guarantee the payment for the timber cut and removed under the terms of said contract, and to guarantee that the merchantable timber included in said contract coming up to the specifications therein indicated will be cut. In consideration of said agreement said Baskett Lumber & Manufacturing Company is to have the necessary rights of way for spur tracks, tramroads and wagon roads, and necessary ingress and egress over the lands of said Gravlees for the purpose of cutting and removing said timber.

The complaint alleges breach of the contract by defendant in this: Defendant had not cut all the merchantable oak timber measuring 30 inches and up, gum timber measuring 18 inches and up, pine timber, measuring 12 inches or more, hickory timber measuring 14 inches or more. Defendant has cut some of the larger, and to it more profitable, timbers of the classes specified in the contract, and has left uncut the small and to it less profitable timber. Defendant did not cut and remove timbers mentioned in said contract as rapidly as ordinary conditions would permit, and defendant has abandoned the cutting of said timbers on said lands mentioned in said contract, and has removed its tracks from said land, leaving a large part of the timbers included in said contract uncut. The pleas took rather the shape of demurrers than pleas, alleging: First, that the contract between plaintiff and Daniel is so indefinite, vague, and uncertain in its terms that the damages flowing from a breach thereof cannot be ascertained, and that the contract of this defendant is a mere guaranty of a pre-existing contract between plaintiffs and Daniel, and no consideration moved to this defendant for such guaranty; also that the contract fails to express the consideration moving to this defendant also that it appears that this defendant is only contingently liable, and that liability had not been established against the principal, Daniel, nor has he been adjudicated in default and failed to respond to the amount of damages that plaintiff might have recovered against him. The objections to evidence sufficiently appear. The following charges were, among others, refused to defendant:

(2) The court charges the jury that if defendant breached the contract sued upon, the burden rests upon plaintiff to reasonably satisfy you by the evidence of the amount of damages which plaintiffs have suffered, measured as provided by law; provided defendant has not been released or discharged; that the measure of such damages is the difference in the contract price of the timber mentioned in the contract and the fair market value thereof at the time the breach of such contract took place; and, if you are reasonably satisfied from the evidence that the value of the timber at the time of the breach of the contract was as much or more than the contract price, then plaintiff cannot recover in this case.

(3) Permits the recovery of nominal damages only.

(4) Affirmative charge for defendant.

(5) If you are reasonably satisfied from the evidence in this case that the relation of this defendant to the contract sued upon is that of guarantor, and that it was only collaterally liable on said contract, and that Daniel, the principal in such contract, has not been adjudged in default, then you should find for defendant.

(6) If you are reasonably satisfied from the evidence in this case that there was no consideration moving to defendant for the execution of its contract of guaranty, then you should return a verdict for defendant.

(11) If you are reasonably satisfied from the evidence in this case that J.P. Daniel cut or had cut and removed the timber and logs upon the land covered by the contract in this case as closely as is the custom of prudent and economical lumbermen to clear the land, then you should return a verdict for defendant.

(13) If you are reasonably satisfied from the evidence in this case that the timber covered by the contract sued on was cut and removed as well as prudent and economical lumbermen would cut such timber, then you should return a verdict for defendant.

Beasley & Wright, of Fayette, for appellant.

McNeil & Monroe, of Fayette, and Ray & Cooner, of Jasper, for appellees.

BROWN J.

It is conceded that the relation of appellant to the transaction out of which this litigation arises is that of guarantor. The point in controversy between the parties is as to when appellant's liability became fixed, if at all. One of appellant's contentions is that liability under the guaranty is not fixed short of the exhaustion of all legal remedies against the principal, and another is that appellant was entitled to reasonable notice of the default of the principal. On the other hand, appellee contends that the guaranty is absolute and appellant's liability became fixed upon default of the principal, without more.

It is well settled that where the guaranty is absolute in terms and for the performance of a specific act at a fixed period, liability of the guarantor becomes fixed on default of the principal; and the guarantor must inquire of his principal, or take notice of his default at his peril, unless notice is stipulated for in the contract of guaranty. Donley v. Camp, 22 Ala. 659, 58 Am.Dec. 274; Leftkovitz v. First National Bank of Gadsden, 152 Ala. 521, 44 So. 617.

The nature of the obligation of the guarantor is affected by the character of the principal contract, to which the guaranty relates; and, if the principal contract expresses an absolute obligation to pay a definite sum at the specified date of maturity or before, a guaranty of the payment of such contract imports an undertaking without condition to perform the contract in the event it is not performed by the principal. Hungerford v. O'Brien, 37 Minn. 306 34 N.W. 167; Sterne's Law of Suretyship, §§ 67, 68. Where, however, as in this case, the obligation is in the nature of a continuing guaranty and the amount to be paid is not fixed and definite, but is dependent upon contingencies not scheduled to happen at a definite time, and the guarantee has better...