Gimbel Brothers v. Mitchell
| Decision Date | 02 March 1920 |
| Citation | 219 S.W. 676,203 Mo.App. 610 |
| Parties | GIMBEL BROTHERS (a corporation), Appellant, v. JAMES L. MITCHELL, Respondent |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis.--Hon. G. B Arnold, Judge.
AFFIRMED.
Judgment affirmed.
Greensfelder & Levi and H. C. Whitehill for appellant.
(1) Parol evidence is inadmissible to explain, modify, diminish or enlarge the terms of a written contract of guaranty or suretyship, such as the written agreement herein sued upon. Hence it was error to admit parol evidence of defendant's intention as to his limitation of the agreement, or of his understanding of the same. Third National Bank v. St Charles Savings Bank, 244 Mo. 554, 576; Beheret v Myers, 240 Mo. 58; Watkins Medical Co. v. Holloway (Mo. App.), 181 S.W. 602; Squier v. Evans, 127 Mo. 514, 518; Shine's Admr. v. Bank, 70 Mo. 524; Royal v. Sutherland, Ann Cas. 1917-B, 623; Friedman Shelby Shoe Co. v. Davidson (Tex. Civ. App.), 189 S.W. 1029; Kansas City v. Youmans, 213 Mo. 151, 166, 167; Sitron & Co. v. Friedberg (Mo. App.), 195 S.W. 69. (2) The agreement sued upon, is an absolute, original, continuing promise to pay, which is unconditional, except as to the amount of goods purchased in any one month, and amounts to an original undertaking on the part of defendant, and is in the nature of a warranty. 12 R. C. L. 1089; Bank v. Shine, 48 Mo. 456; Mfg. Co. v. During, 85 Mo.App. 131; Linro Medicine Co. v. Moon (Mo. App.), 177 S.W. 322; Bank v. Pillman, 176 Mo.App. 430; Bank v. Stewart, 152 Mo.App. 314; Allen v. Burgener, 156 Mo.App. 265; Pearsell Mfg. Co. v. Jeffreys, 183 Mo. 386; McGinness & Ingles Co. v. Taylor, 22 Mo.App. 513; Cooper Gro. Co. v. Ferguson & Holland, 198 S.W. 573; Stearns v. Jones (Tenn.), 199 S.W. 400; Hurley v. Fidelity & Deposit Co., 95 Mo.App. 88; Watkins Medical Co. v. Holloway (Mo. App.) 181 S.W. 602. (3) Such agreement bound the defendant, unconditionally to satisfy the obligation, which was to pay the debt of Mrs. Reber; and upon her failure to pay, action may be maintained directly against defendant without prior demand upon him, or notice to him of non-performance by Mrs. Reber. Bank v. Shine, 48 Mo. 456; Thornton v. Bowie (Ark.), 185 S.W. 793; Wilson v. White (Ark.), 12 Ann. Cas. 378; Homewood People's Bank v. Hastings (Pa. 1919), 106 A. 308; Iron Store National Bank v. Rafferty, 207 Pa. 238; Hess v. Watkins Medical Co. (Ind.), 123 N.E. 433; Wright v. Dyer, 48 Mo. 525; Allen v. Burgener, 156 Mo.App. 265; Barker v. Scudder, 56 Mo. 272; McGowan v. Wells, Trustee (Ky.), 213 S.W. 573; Third National Bank v. St. Charles Savings Bank, 244 Mo. 544, 576; Beheret v. Myers, 240 Mo. 58; Hurley v. Fidelity & Deposit Co., 95 Mo.App. 88; Linro Medicine Co. v. Moon, (Mo. App.), 177 S.W. 322; Bank v. Pillman, 176 Mo.App. 430; Bank v. Stewart, 152 Mo.App. 314; Pearsell Mfg. Co. v. Jeffreys, 183 Mo. 386. (4) A contract of guaranty or suretyship, being made with full knowledge concerning the transaction, will be presumed to be written in the language intended to be used by the guarantor, and is to be construed most strongly against him. Bank v. Pillman, 176 Mo.App. 438; Hurley v. Fidelity & Deposit Co., 95 Mo.App. 88, 94; Sitron & Co. v. Friedberg (Mo. App.), 195 S.W. 69, 70; Kansas City v. Youmans, 213 Mo. 166; Shine v. Bank, 70 Mo. 533. (5) Where a cause of action arises under the laws of a foreign State, or a contract is to be performed in a foreign State, and the laws or statutes of such foreign State are not both pleaded and proven at the trial in the courts of Missouri, the courts of this State will determine the rights of the parties according to the common law. Hence action in the courts of Missouri upon the agreement was not barred by the Statute of Limitations either of the State of Missouri or of the State of Pennsylvania, as under the common law the absence of the defendant from the State of Pennsylvania operated to suspend the running of the Statute of Limitations independent of such statute. R. S. 1909, sections 1895, 6281, 6282; Daniels v. Gallagher (Mo. App.), 189 S.W. 644; Rialto Co. v. Miner, 183 Mo.App. 119; Sterling v. Parker-Washington Co., 185 Mo.App. 192; Lee v. Railway, 195 Mo. 400; Mathieson v. Railroad, 219 Mo. 542; Thompson v. Railroad, 243 Mo. 336; Baker v. St. Louis, San Francisco R. R. Co. (Mo. App.), 172 S.W. 1185; Cobb v. Houston, 117 Mo.App. 645; Tennent v. Union Central Life Ins. Co., 133 Mo.App. 345; Shelton v. Metropolitan Street Ry. Co., 167 Mo.App. 404; Madden v. Railway Co., 167 Mo.App. 143; Rashall v. Railway Co., 249 Mo. 509.
Lester M. Hall for respondent.
(1) When doubt exists as to the meaning of a guaranty, defendant has the right to his version of the contract, and in ascertaining what was the understanding of the parties, the circumstances attending the whole transaction are to be looked into. Deniston v. Schaal, 5 Super. Ct. 632 (Pa.); Aldridge v. Eshluven, 46 Pa. 420; Pingrey on Suretyship, sec. 356; Merchants National Bank v. Cole, 83 Ohio 50; Ulster Co. Savings Bank v. Young, 161 N.Y. 30; Hurlbut v. Kephat, 50 Colo. 359-360. With this rule our courts are in full accord. Beers v. Strimple, 116 Mo. 184; Gray v. Davis, 89 Mo.App. 450; Kansas City to use, etc., v. Youmans, 213 Mo. 167; 32 Cyc, pages 71-72. (2) Parol testimony is admissible, not to vary, but to arrive at the intention and understanding of the meaning of the language used. Merchants National Bank v. Cole, 83 Ohio 50; Smith v. Van Wyck, 49 Mo.App. 525. (3) When this intention is arrived at, the contract must be strictly construed. Leavel v. Porter, 52 Mo.App. 640; Erath & Flynn v. Allen & Son, 55 Mo.App. 113; Morgan v. Boyer, 39 Ohio St. 326. (4) The surety's liability is not to be extended by implication beyond the express terms of the instrument. Kansas City to use, etc., v. Youmans, 213 Mo. 165; London and S. F. Bank v. Parrott, 125 Cal. 481-2; Douglass et al. v. Reynolds et al., 7 Peters, 122. (5) Sureties are favorites of the law. If there be an ambiguity in the contract, the construction should be in favor of the surety. Hill Mercantile Co. v. Rotan Grocery Co. (Texas), 127 S.W. 1080; Kansas City to use, etc., v. Youmans, 213 Mo. 182 (LAMM, J.); Beers v. Strimple, 116 Mo. 184; Gray v. Davis, 89 Mo.App. 450. (6) While the contract sued upon continued "from month to month," it was not an unlimited suretyship to the aggregate of $ 500. Each month's purchases were one complete transaction, requiring a complete settlement, and respondent's liability extended to but one month at a time. Respondent could not be held for a running account for an unlimited number of months. Delbridge v. L. H. P. & C. B. & L. Assn., 82 Ill.App. 388, 122 N. Y. App. 648; Nelson v. Shreve, 94 Mo.App. 526; Davis v. Wells, 104 U.S. 170; Gerka v. Brewing Co., 22 Ohio Circuit 671. (7) The creditor must deal with the surety in good faith, otherwise, if the surety is damaged by his failure to do so, the surety is discharged. In order to hold respondent liable for purchases subsequent to June, 1912, good faith required that appellant should have given notice of the default on the June account, and thus have given respondent an opportunity to revoke his contract and prevent cumulative losses, and that within reasonable time. Pingrey on Suretyship, secs. 352-3-4; Taussig et al. v. Reid et al., 145 Ill. 494; Bank v. Scudder, 56 Mo. 272; Crafts v. Isham, 13 Conn. 33; Douglass et al v. Reynolds et al., 104 U.S. 170; Stearns on Suretyship, sec. 107; 2 Parsons on Contracts, sec. 23. (8) Having failed to notify respondent of the default on the June account within a reasonable time, no liability attached to respondent for the account of July and subsequent months, and as to future purchases the contract was of no effect. Being dead, it could not be revived by subsequent payments by Reber. (9) The account for June, as also for July and August, was eventually paid in full by Reber, and upon such payment respondent's liability under the contract was finally discharged. The rule that payments on a running account will be applied to the oldest items is too well settled to require authorities. (10) The contract having no fixed limit of expiration, should be held to expire within a reasonable time. Such reasonable time would be the time fixed by the Statutes of Limitation. This period expired even under the laws of this State before the commencement of this action. Wilson's Admr. v. Wilson, 1 McMull. Eq. (S. C.) 329; Howland v. Edmunds, 24 N.Y. 307; Herrick v. Wolverton, 41 N.Y. 584; Doe v. Thompson, 22 N.H. 217. It is analogous to a note payable on demand. Dorland v. Dorland, 5 P. 77; Douglas v. Sargent, 4 P. 861; Palmer v. Palmer, 36 Mich. 487; Bowman v. McChesney, 22 Grattan 609; Young v. Weston, 39 Maine 492; Jamison v. Jamison, 72 Mo. 642.
This case originated in the Circuit Court of the City of St. Louis, by plaintiff filing its petition, wherein it is alleged the defendant is indebted to it in the sum of $ 492.17, by reason of a written guaranty, whereby the defendant became responsible for the payment of merchandise, bought by one, Mrs. G. B. Reber, to an amount not to exceed $ 500 per month.
The answer admitted:
First: the execution of the written guaranty, and admitted that plaintiff demanded payment of the account after March 1, 1914;
Second: That the purchases of Mrs. Reber were made more than nine years after the date and delivery of the agreement, and that defendant is not liable or indebted to plaintiff;
Third That by the terms of the agreement, plaintiff was required to make settlement for purchases each month, at the expiration thereof, and that defendant was entitled to reasonable notice of any default, in order to...
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