Cullum v. Commercial Credit Co., 5062.

• Decision Date: 09 October 1939
• Docket Number: No. 5062.,5062.
• Citation: 134 S.W.2d 822
• Parties: CULLUM et al. v. COMMERCIAL CREDIT CO.
• Court: Texas Court of Appeals

134 S.W.2d 822

CULLUM et al. v. COMMERCIAL CREDIT CO.

No. 5062.

Court of Civil Appeals of Texas. Amarillo.

October 9, 1939.

Appeal from District Court, Potter County; W. E. Gee, Judge.

Action on contract of guaranty by Commercial Credit Company against Fred Cullum and others. From a judgment denying a plea of privilege by Fred Cullum and another, defendants appeal.

Judgment affirmed.

Sturgeon & Sturgeon, of Pampa, for appellants.

Clayton & Bralley, of Amarillo, for appellee.

STOKES, Justice.

On the 19th of February, 1938, George W. Taylor, a resident of Gray County, purchased an automobile from appellants, Fred Cullum and Frank Henry Cullum, who also were residents of Gray County and engaged in business at Pampa as a co-partnership under the trade name of Cullum & Son. As part of the consideration Taylor executed a note in the sum of $1259.96, payable in six monthly installments, the first five installments being in the sum of $60 each, and the sixth in the sum of $959.96. The note was payable to Cullum & Son at the office of the appellee, Commercial Credit Company, at Amarillo, which is in Potter County, and provided for interest after maturity at the rate of ten percent per annum. Contemporaneously with the execution of the note Taylor executed a chattel mortgage of the automobile and the note and chattel mortgage were assigned to appellee by Cullum & Son without recourse. On the 24th of February, 1938, five days after the execution of the note and chattel mortgage, appellants, Cullum & Son, executed and delivered to appellee an instrument designated "Dealer Guaranty of Purchaser Account" in which the following clause appears:

"You require Undersigned's unconditional guaranty that the purchaser shall pay his obligations under said security instrument and/or note, otherwise you will refuse to purchase the same, or if purchased will redraw upon Undersigned for the amount thereof, as agreed. Undersigned requests you to purchase or continue to hold such security instrument and/or promissory note, and in consideration thereof Undersigned hereby guarantees the prompt payment of the same and each and every instalment thereof as the same shall become due and payable. Undersigned will immediately upon demand pay any amounts due, for the payment of which the purchaser is in default, under said security instrument and/or promissory note, without requiring any proceedings to be taken by you as against the purchaser. The liability of Undersigned hereunder shall not be modified in any manner whatsoever by any extension that may be granted to purchaser by any court in any proceeding under the Bankruptcy Act or any Amendment thereof and Undersigned expressly waives the benefit of any such extension. If purchaser shall at any time be in default in payment of three (3) instalments of said note Undersigned will thereupon forthwith pay the entire unpaid balance owing on said note."

Taylor, the maker of the note, defaulted in three installments and appellee, on July 13, 1938, filed this suit in the district court of Potter County against George W. Taylor and appellants, Fred Cullum and Frank Henry Cullum, seeking a joint and several judgment and foreclosure of the chattel mortgage lien.

Appellants, Cullum and son, filed pleas of privilege in due form and prayed that the cause of action be transferred to Gray County where all of the defendants resided. Controverting affidavits were filed in response to the pleas and upon a hearing of the issues made thereon the trial court overruled the pleas of privilege to which appellants duly excepted, gave notice of appeal, and have brought the case before this court for review.

The principal contention made by appellants is that, inasmuch as the contract of guaranty executed by them does not expressly name Potter County as the place of performance and, it being undisputed that appellants reside in Gray County, the district court of Potter County could not maintain venue of the case in the face of proper pleas of privilege. Error is assigned, therefore, to the action of the court in overruling appellants' pleas of privilege.

In support of their contention appellants assert that under the provisions of Sub. 5 of Art. 1995, R.C.S.1925, as amended by the Acts of the 44th Legislature, p. 503, ch. 213, § 1, Acts of 1935, Vernon's Ann.Civ.St.Art. 1995 subd. 5, venue of the case cannot be maintained in Potter County in disregard of the pleas of privilege because the contract of guaranty which they signed does not, by its own terms, expressly name Potter County or a definite place therein where they agreed to perform the obligations created by the contract of guaranty. The amendment referred to provides that if a person has contracted in writing to perform an obligation in a particular county, expressly naming such county or a definite place therein by such writing, suit upon such obligation may be brought against him either in such county or where he has his domicile. A reference to the contract of guaranty will reveal the absence of any stipulation or agreement within its own terms whereby appellants specifically agreed to perform the guaranty obligation in Potter County or expressly named that county or a definite place therein where it should be performed. The contract, however, is one of guaranty and as a general rule the liability created by it is measured by that of the principal. It has long been so held in this as well as other jurisdictions unless a more limited or more extensive liability is specified by the guarantor. McCauley v. Cross et al., Tex.Civ.App., 111 S.W. 790; Looney v. Le Geirse & Co., 2 Willson Civ.Cas.Ct. App. § 531, page 477; Bagley v. Cohen, 121 Cal. 604, 53 P. 1117; Groendyke v. Musgrave, 123 Iowa 535, 99 N.W. 144; Franklin v. The Duncan, 133 Tenn. 472, 182 S.W. 230, Ann.Cas.1917C, 1080.

The contract of guaranty entered into by appellants in this case was an absolute and unconditional one. It provided that appellants would guarantee the prompt payment of the note and each and every installment thereof as the same shall become due and payable. The note, according to its specific terms, was payable at...