Bradshaw v. Sibert

• Decision Date: 21 July 1916
• Docket Number: No. 19893[251].,19893[251].
• Citation: 134 Minn. 186,158 N.W. 830
• Parties: BRADSHAW et al. v. SIBERT.
• Court: Minnesota Supreme Court

134 Minn. 186

158 N.W. 830

BRADSHAW et al.

v.SIBERT.

No. 19893[251].

Supreme Court of Minnesota.

July 21, 1916.

Appeal from District Court, Freeborn County; Nathan Kingsley, Judge.

Action by James B. and Dawson Bradshaw, copartners, against J. G. Sibert. From a judgment for defendant, plaintiffs appeal. Reversed, and new trial granted.

Syllabus by the Court

A writing wherein, in consideration of plaintiffs' furnishing to a person named therein merchandise as desired by such person for four months after a specified date, defendant agreed to be liable for the same, is construed to be a continuing guaranty during the time stated. Only the extent of defendant's liability, and not the amount of merchandise to the furnished, was limited by the proviso: ‘Provided, however, that my liability on this guaranty shall not exceed the sum of $400.’ David R. Thomas, of Minneapolis, for appellants.

Henry A. Morgan, John F. D. Meighen, and Bennett O. Knudson, all of Albert Lea, for respondent.

SCHALLER, J.

On February 4, 1910, defendant executed and delivered to plaintiffs a written guaranty, which, so far as here material, reads:

‘In consideration of your furnishing to Miss C. R. Moses of Minneapolis, Minn., merchandise as desired by her for four months from January 5, 1910, I hereby agree to be liable for the same, and extensions of time of payment may be granted by you without releasing me from such liability: Provided, however, that my liability on this guaranty shall not exceed the sum of four hundred dollars ($400.00).’

During the time specified in the writing, plaintiffs furnished to Miss Moses merchandise to the amount of $1,060.38, upon which she paid $372.44. They subsequently furnished her more goods upon which she made other payments, but eventually there was a balance due them. At one time, when pressed on his guaranty, defendant, without knowledge that Miss Moses had paid anything on the account, paid plaintiffs $199.90. In this action, brought to recover the balance under the guaranty, defendant counterclaimed on the theory that his obligation was limited to the first $400 worth of merchandise sold during the four-month period and, because Miss Moses had paid thereon $372.44, he, in making the payment exacted by the plaintiffs, unwittingly overpaid his obligation to the amount of $172.34. The learned trial court adopted defendant's theory of the law, and directed judgment accordingly. Plaintiffs appeal from the judgment entered.

During the time stated in the writing. plaintiffs were engaged in the wholesale millinery business in Minneapolis, Minn., in which city Miss Moses was conducting a retail millinery store. The court found that the writing mentioned was ‘the only agreement or contract between said plaintiffs and defendant, whereby he became or is sought to be held liable in this action for any amount.’ When there is ambiguity in the language of a contract, surrounding circumstances and, perhaps, contemporaneous writings, made or acquiesced in by the parties to the contract as explanatory of the same, may be resorted to in order to ascertain the meaning and intention of the instrument. In this case, defendant insists that a letter written by him to plaintiffs on January 19, 1910, should be considered in construing the guaranty, because the guaranty was sent with the letter and was therein referred to. The difficulty with the proposition is: (a) We are not persuaded that this letter is part of the settled case; it is found in the files attached to a deposition given by one Tyson, but, Tyson having been present at the trial, no use was made of his deposition or of the exhibits attached thereto; and (b) the finding of the court, as above stated, confines us to the guaranty itself, in construing the obligation assumed by defendant.

This court is not committed to a rule of strict construction in favor of the guarantor in cases of commercial credit guaranties. The view has been announced that such a ‘guaranty should be neither extended beyond the fair...