General Finance Co. v. Powell

• Decision Date: 21 May 1943
• Docket Number: 8368.
• Citation: 138 P.2d 255,114 Mont. 473
• Parties: GENERAL FINANCE CO. v. POWELL et al.
• Court: Montana Supreme Court

138 P.2d 255

114 Mont. 473

GENERAL FINANCE CO. v. POWELL et al.

No. 8368.

Supreme Court of Montana

May 21, 1943

Rehearing Denied June 7, 1943.

Appeal from District Court, Eighth District, Cascade County; H. H Ewing, Judge.

Action by General Finance Company against West L. Powell and another on contract of guaranty entered into in connection with conditional sales contract. From an adverse judgment, the defendants appeal.

Affirmed.

LaRue Smith, H. R. Eickemeyer, and W. P. Costello, all of Great Falls, for appellants.

Swanberg & Swanberg, of Great Falls, for respondent.

MORRIS Justice.

This is an action on a contract of guaranty entered into in connection with a conditional sales contract. "General Finance Company" is merely a trade name under which William R. Davis, the plaintiff, carries on his business which it appears consists in part of dealing in conditional sales contracts, and likewise "Industrial Machinery Company" is a trade name under which West L. Powell, the defendant, carries on the business of a retail dealer in machinery. The place of business of both parties is Great Falls. The respective concerns appear to be owned entirely by the two individuals mentioned.

The defendant sold to Surmi Mines, a corporation engaged in coal mining some twenty-five miles south of Great Falls, a portable air compressor, with certain equipment including a Diesel engine. The contract price was $1,099. A different question involved in this controversy was before us under the same title and by the same parties in Case No. 8216, reported in 112 Mont. 535, 118 P.2d 751, and for the sake of brevity that case is referred to for the pertinent details involved in the transaction. Before the instant action was commenced the machinery was delivered to the plaintiff by the purchaser and sold by the plaintiff for $25, which amount was credited on the sales contract.

On the reverse side of the conditional sales contract this assignment and guaranty, executed by the defendant, appears:

"For value received, the undersigned hereby sells, assigns, and transfers to General Finance Co., of G. F., its successors or assigns, all right, title and interest in and to the within contract, the accounts payable thereunder, the property therein described, and the rights therefrom ensuing. The undersigned hereby guarantees the full performance of said contract and prompt payment of all sums due thereunder, together with all collection expenses; ***. The undersigned agrees that any extension, compromise or settlement that may be granted or made by the holder hereof to or with the parties to said contract shall not in any manner release the undersigned.

By West L. Powell"

On the delivery of the conditional sales contract by the defendant to the plaintiff with the contract of guaranty endorsed thereon the plaintiff paid the defendant $600 by check on the First National Bank of Great Falls, and at the same time issued to the defendant two "Deferred Certificates" for $150 each. One of such "deferred certificates" was admitted in evidence as plaintiff's Exhibit 4, and as it relates to the contractual relations between the parties its provisions are here recited:

"Deferred Certificate

April 9th, 1940 No. 1451

The General Finance Company of Great Falls will pay to Industrial Machinery Co. One Hundred and Fifty dollars ($150.00) without interest, when and if the undersigned receives payment in full of the note or notes described on the margin hereof. This obligation shall be void and unenforceable unless presented for payment within three (3) years from the date hereof. General Finance Company reserves the right to renew, extend or compromise said note or notes, repossess and sell the property covered thereby and further reserves the right to offset against the amount due hereunder any indebtedness of the above payee of any kind whatsoever to the undersigned which may accrue prior to said maturity and/or the payment of the balance if any, to the holder hereof which shall be in full satisfaction of this obligation. This instrument may be assigned or transferred by endorsement hereon subject to all of the conditions hereof, and is payable only on the above conditions and upon surrender hereof at the office of General Finance Co., Great Falls, Montana.

General Finance Co., of Great Falls"

The plaintiff collected installments on the sales contract aggregating $300. Plaintiff's uncontradicted testimony is that these payments were made by the defendant. Whether the defendant collected any part of the $300 from the Surmi Mines, Inc., or not does not clearly appear. The plaintiff took up one of the deferred certificates, paying the defendant $150 therefor. No further payments were made on the sales contract resulting in default which, by the terms of the contract, brought all unpaid installments to maturity. Negotiations between the plaintiff and defendant relative to payment of the balance due on the sales contract resulted in a meeting between them at the office of defendant's attorney, Mr. W. P. Costello, now deceased, and the meeting resulted in a tacit compromise agreement. The defendant made out a check for $540, left it in the possession of Mr. Costello to be delivered to the plaintiff when the plaintiff should have the machinery delivered at the Great Falls Iron Works' plant for the defendant. The plaintiff's uncontradicted testimony is that this mode of adjustment was proposed by the defendant.

The plaintiff testified on cross-examination that he had the machinery delivered as agreed, but the defendant then repudiated the agreement and directed Costello not to deliver the check. Thereupon, the plaintiff had the machinery advertised and sold by the sheriff, and no satisfactory bids being received the plaintiff bought the machinery in for $25 and later sold it for $50. The $25 for which the plaintiff bid the machinery in was credited on the amount due on the sales contract, reducing the amount due thereon by that sum.

The plaintiff did not pay the defendant the $150 provided for in the second "deferred certificate." It appears that such payment was not made for the reason that payments on the sales contract were never made in amounts sufficient to bring such second certificate, according to its terms, to maturity but the plaintiff allowed the defendant credit for that certificate, demanding in this action only $524, with interest and costs. For the sake of clarity, we recapitulate:

The contract price for the machinery was .....	$1099.00
Credits thereon were as follows:
Cash paid when purchase was made ............	$100.00
Installments paid on sales contract ..........	300.00
Credit for sale price of machinery ............	25.00
Credit a/c for one "deferred certificate" ....	150.00
Total ..........................................	575.00
	--------
Balance sued for ............................	$524.00

A copy of the conditional sales contract was received in evidence as plaintiff's Exhibit 1 and is copied in the record. It contains the usual provisions and conditions found in such contracts.

The action was tried by the court sitting with a jury. The only testimony was by the plaintiff and Mike Surmi of Surmi Mines Inc. Surmi's testimony was along the lines of...