Hooper v. Hooper
| Decision Date | 27 March 1895 |
| Citation | 31 A. 508,81 Md. 155 |
| Parties | HOOPER v. HOOPER ET AL. |
| Court | Maryland Court of Appeals |
Appeal from circuit court of Baltimore city.
Action by Theodore Hooper and another against Alcasus Hooper for contribution to the amount paid by plaintiffs under a contract of guaranty executed by plaintiffs and defendant. Judgment was rendered for plaintiffs, and defendant appeals. Affirmed.
Argued before ROBINSON, C.J., and ROBERTS, PAGE, BOYD, FOWLER McSHERRY, and BRISCOE, JJ.
Ed Otis Hinkley, John T. Morris, and Thos. Foley Hisky, for appellant.
Thos M. Lanahan and Frank Gosnell, for appellees.
To understand the questions raised in the record now before us it is necessary, at the threshold, to outline briefly the material facts disclosed by the bill, the answer, and the evidence. The late William E. Hooper was possessed at the time of his death, in 1885, of an undivided one-half interest in certain lands and mill property, and three of his four sons, viz. Theodore, James E., and Alcasus, were possessed in equal shares of the remaining undivided one-half interest therein; and the father and those three sons were then, and previously had been, carrying on, as copartners, the business of cotton-duck manufacturers, under the firm name of William E. Hooper & Sons. The elder Mr. Hooper, by his last will and testament, authorized his executors to unite with the other joint owners of the mill property in forming a corporation, and in 1886 a body corporate, known as the Woodberry Manufacturing Company, was duly chartered. One-half of the capital stock of this company was issued to the executors and trustees named in the will of William E. Hooper, in payment for the interest which he in his lifetime held in the mill property, and the other half was issued in equal thirds to the other three joint owners, in payment for their respective interests in the same property. The other son, William J. Hooper, was largely indebted to the firm of William E. Hooper & Sons. His father had guarantied the payment of that indebtedness to the firm, and, after the death of the father, William's debt to the firm was accordingly charged to the father's account, thus making William a debtor to the estate for the amount which he had owed the firm; and when William was credited, as against this, with his part of his father's estate, it did not extinguish that indebtedness in full, but still left him, as to the surplus, a debtor to the estate. In 1886, William failed in business, and conveyed his property to trustees for the benefit of his creditors. In the year 1889, he was indebted to the Woodberry Manufacturing Company, whose stock was held, as just stated, by his father's estate and by his three brothers, and he desired to obtain from that company further advances of money and goods. Accordingly, his three brothers (two of whom are the plaintiffs in this case, and one of whom is the defendant) executed and delivered to the Woodberry Manufacturing Company the following guaranty: Then follow other provisions which need not be alluded to. The paper was signed by the three promisors named therein. The advances or loans to which this guaranty relates began October 8, 1888, and ran through the month of December of that year, and the months of March, April, May, down to June 4, 1889, up to which latter date, exclusive of interest, they aggregated $33,800. Interest to September 30th of the same year, amounting to $1,047.77, was added, making the sum total due on that date $34,847.77. On this sum William J. Hooper paid, in 1890, to the Woodberry Company, three installments of interest; and on March 6, 1891, he paid a fourth installment, which settled the interest in full to February 1, 1891. No further interest was paid by him till February 7, 1894, when he gave his note, payable in six months, for a part of the principal and interest then due, and this was credited on the account as a payment. During the whole period of time covering these advances to William J. Hooper, and up to July, 1891, the defendant, Alcasus Hooper, was treasurer of the Woodberry Manufacturing Company. On April 15, 1891, Alcasus Hooper gave notice in writing to the Woodberry Company, to William E. Hooper & Sons, to William J. Hooper, and Theodore and James E. Hooper, that he declined "to be responsible for any * * * indebtedness which shall be incurred on and after the date of this notice," under the guaranty of April, 1889, and that he withdrew "from said agreement." On March 26, 1894, the Woodberry Company demanded payment from William J. Hooper of the amount due by him to it, and on the same day requested the three guarantors to pay to it the amount whose payment was jointly and severally guarantied by them under the agreement of April, 1889. William J. Hooper made answer that he would be unable to settle during that year, and the evidence shows that such was the fact. On the day following, the plaintiffs addressed a letter to the defendant advising him that they would, on the 2d day of the ensuing April, meet this obligation to the Woodberry Company, and requesting him to contribute his share or proportion thereof. They received no reply, and on the day designated they paid to the Woodberry Company, in the manner which will be explained later on, the sum of $41,224.17, being the amount, including interest, due by William J. Hooper. On the same day they notified the defendant that they had paid the money, and they thereupon made a formal demand on him for contribution. On the next day, April 3d, the plaintiffs filed a bill in equity against the defendant for contribution. On May 14th the defendant filed a demurrer to that bill, and relied, among other things, upon the fact that the suit had been prematurely brought. As under the guaranty, according to his construction of it, no action could be instituted thereon until after the expiration of the 30-days notice therein provided for, and as the notice actually given bore date March 26th, the bill filed on April 2d was filed prior to the expiration of the 30 days from the date of the notice, and therefore was filed prematurely. The court below, adopting that view, dismissed the bill, without prejudice, on May 28th, and on the next day the bill now before us was filed. The prayer of this bill, as it was of the former one, is for a decree compelling the defendant, one of the guarantors, to contribute and pay to the plaintiffs, the other guarantors, the amount claimed to be due to them by him on account of the payment made by them for him, to the Woodberry Company, of his proportion of the debt covered by the guaranty of April, 1889. In his answer he relies on the statute of limitations, and insists that he is not liable after three years from the date of the guaranty, or, at most, not after three years from the date of the last loan by the Woodberry Company to William J. Hooper; and he denies that the plaintiffs have paid any amount under the guaranty at all.
There is no dispute that the guaranty was executed, delivered, and accepted, or that the Woodberry Company advanced money and delivered goods to William J. Hooper; nor is there the slightest pretense that Alcasus Hooper has ever paid a single cent to reimburse his brothers any portion of the amount they paid for him under the guaranty. The defendant seeks to escape all liability to the plaintiffs, and to avoid a compliance with the obligation which he deliberately, and with full knowledge of all the facts, assumed, by now taking refuge behind the plea of the statute of limitations. Utterly ignoring whatever of equity there is in the claim which they prefer against him, and without venturing to go upon the witness stand or to question under his oath any allegation of the bill, he repudiates the liability which has arisen under his explicit and formal contract; and he repudiates it because more than three years have elapsed between the date of that contract and the time when these proceedings were begun. It is difficult to conjecture how, under all the circumstances of this case, a less meritorious defense could have been attempted.
While the undertaking of a guarantor technically differs from that of a surety (Kramph v. Hatz, 52 Pa. St. 525), still the contract of guaranty is the obligation of a surety ( Davis v. Wells, Fargo & Co., 104 U.S. 159). Both are accessory contracts. That of a surety is in some sense conditional; that of a guarantor is strictly so. A guaranty is a secondary, while a suretyship is a primary, obligation. A guaranty is a mercantile instrument, to be construed according to what is fairly to be presumed to have been the understanding of the parties, without any strict technical accuracy, but in furtherance of its spirit, and liberally to promote the use and convenience of commercial intercourse. It should be given that effect which will best accord with the...
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