Industrial Bank & Trust Co. v. Hesselberg
| Decision Date | 10 June 1946 |
| Docket Number | 39523 |
| Citation | 195 S.W.2d 470 |
| Parties | Industrial Bank & Trust Company, a Corporation, Appellant-Respondent-Plaintiff, v. Max Hesselberg, Appellant-Respondent-Defendant, and Victor L. Gould, Respondent Non-Appealing Defendant |
| Court | Missouri Supreme Court |
From the Circuit Court of the City of St. Louis, Civil Appeal Judge Robert J. Kirkwood
Affirmed and Remanded with Directions
Action to recover $9091.44, an amount, including interest, allegedly due plaintiff of defendants under a contract of guaranty. The trial court referred the case to a referee who was directed to "determine the whole of the issues"; and, the referee having made report, the trial court approved and confirmed the referee's report and rendered judgment for plaintiff and against both defendants for $4701.65. Plaintiff has appealed, contending that the referee and the trial court erroneously refused to find for plaintiff upon issues relating to three items of plaintiff's claim; and that the trial court erroneously failed to allow interest on the amount found to be due plaintiff. And defendant-guarantor Max Hesselberg, has appealed from the judgment for plaintiff. The other defendant-guarantor, Victor L. Gould, has perfected no appeal.
The instrument of guaranty was dated June 11, 1935, at which time Kingsland Motor Company (hereinafter referred to as "Motor Company"), an Illinois corporation, was engaged in the automobile sales business at Wood River Illinois. Motor Company, in conducting its business, established a "line of credit" with plaintiff whereby its customers' notes were sold or pledged and other obligations were incurred to secure moneys advanced Motor Company by plaintiff, and the referee has found that the line of credit was extended in reliance upon the further guaranty of payment as undertaken by the instrument herein involved.
The instrument guaranteed the payment of (a) all "obligations of Motor Company on, arising out of, or connected with notes, contracts or other choses in action, hereinafter called 'accounts,'
- - - purchased by Trust Company from Motor Company with recourse on Motor Company, whether such recourse be by endorsement, guaranty, repurchase agreement or otherwise; provided that the aggregate total of the outstanding, unpaid balances on such accounts shall at no time exceed $1,500.00 - - -"' (b) loans (not more than twelve) made by plaintiff to Motor Company for the payment of cost of new motor vehicles; (c) loans (not more than four) made for the payment of cost of new motor vehicles to be used as demonstrators; and (d) loans (not more than twelve) for the purpose of enabling Motor Company to handle used automobiles. On or about April 1, 1936, Motor Company "blew up," and since that date its officers have not been found. When Motor Company so ceased to operate, the plaintiff held notes purchased, and other obligations of Motor Company within the terms of the guaranty, on which obligations there was due, plaintiff contends, the aggregate sum of $5682.15. On this sum plaintiff claims interest at 6% per annum from the date demand for payment was made of defendants-guarantors.
Defendant-appellant Hesselberg asserts the issues were improperly submitted to a referee. It may here also be stated that (if it is found the case was properly referred) the parties differ on whether this court should review the case as if triable de novo; or whether the referee's report, approved and confirmed by the trial court, is to be considered herein as if the report were a verdict of a jury and the trial court's judgment affirmed if the referee's finding of facts is sustained by substantial evidence.
Appellant Hesselberg further contends (1) he is not obligated by the alleged contract of guaranty because the instrument was only an offer to be obligated and he at no time received notice of the acceptance of the offer; (2) no consideration supported the contract of guaranty; and (3), if it be found that the instrument was a valid guaranty obligating appellant Hesselberg, nevertheless, under the facts, there was no sum due and owing to plaintiff from Motor Company; or, in no event, does his liability, under the terms of the instrument, exceed the sum of $1500.
Plaintiff (as respondent) asserts the converse of the contentions of appellant Hesselberg; and, as stated, plaintiff (as appellant) contends the trial court erred in refusing to find for plaintiff upon three "accounts," and for interest.
Referring to the contention of impropriety in referring the issues to a referee - no objection was interposed to the appointment of the referree at the time of such appointment, nor was there a demand of the trial court that the issues of fact be submitted to a jury. The objection to the reference and the appointment of the referee, not made to the trial court at the time of the referee's appointment (it is not seen that appellant Hesselberg had no opportunity to object at the time), but first made before the referee at the time he commenced his hearing of testimony, did not preserve the question for review. Section 122, Civil Code of Missouri, Laws of Missouri 1943, p. 389; State ex rel. Kimbrell v. People's Ice, Storage & Fuel Co., 246 Mo. 168, 151 S.W. 101.
The referee, having heard the issues of law and fact presented, made report; and the trial court, exceptions having been filed, reviewed and confirmed the report. It is held in the case at bar, an action at law, that the referee's report, having been approved and confirmed by the trial court, has the force of a verdict of a jury, and, if supported by substantial evidence, the report is in practice considered conclusive as to the facts. Paisley v. Lucas, 346 Mo. 827, 143 S.W.2d 262; Nodaway County v. Kidder, 344 Mo. 795, 129 S.W.2d 857; Section 1159 R.S. 1939, Mo.R.S.A. § 1159. But this court will set aside the referee's conclusions of law, if erroneous, although the referee's report was confirmed by the trial court, and apply correct conclusions of law to the facts. Paisley v. Lucas, supra; Grand Lodge of United Brothers of Friendship and Sisters of Mysterious Ten v. Massachusetts Bonding & Insurance Co., 324 Mo. 938, 25 S.W.2d 783; Steffen v. St. Louis, 135 Mo. 44, 36 S.W. 31.
In an instance where there has been but an offer of proposal to guarantee the performance of an undertaking of another, there is no contract until the offer is accepted. This is the rule as to contracts generally. Gillen v. Bayfield, 329 Mo. 681, 46 S.W.2d 571. And, except where the offer by its terms is acceptable, without notice, by the offeree's performance, there is no binding contract of guaranty unless it has been made known to the offerer that the offer has been accepted; otherwise the offerer would not have seen a landmark from which to measure the extent of his liability. Ireland v. Shukert, Mo.App., 177 S.W.2d 10; Texas Co. v. Stanberry, Mo.App., 165 S.W.2d 696. Adhering to the rule that acceptance and notice of acceptance of a mere offer of guaranty are necessary, yet acceptance and notice thereof may be inferred if the circumstances justify the inference, or notice of acceptance may be waived if a purpose to do so appears in the terms of the offer or in the conduct of the parties. Pearsell Mfg. Co. v. Jeffreys, 183 Mo. 386, 81 S.W. 901. In the case at bar it may be assumed that the instrument signed by defendants-guarantors constituted but an offer or proposal of guaranty. Substantial evidence supports the referee's finding that plaintiff accepted the offer and acted in reliance thereon. Defendants-guarantors were not actually notified that the terms of the offer were accepted, but the instrument contained the provision that, as to all obligations to which the guaranty applied, the guarantors waived "Notice of acceptance of this Guaranty." It is thus apparent from the terms of the instrument itself that the defendants-guarantors expressly waived notice of the acceptance of the offer. The contention (1) is ruled against appellant Hesselberg. (2) It is not necessary to the validity of contract that a consideration be of real value to the promisor. A benefit to a third person, or a detriment to the promisee or a change in his relations in consequence of the promise is sufficient consideration to render the promisor obligated. Duvall v. Duncan, 341 Mo. 1129, 111 S.W.2d 89; 17 C.J.S., Contracts, § 89, p. 436; 12 Am.Jur., Contracts, § 79, pp. 570-573. In the instant case a sufficient consideration supported the guaranty. Plaintiff advanced moneys to Motor Company in reliance upon the undertaking of defendants-guarantors.
As stated, it is contended (3) that, under the facts, no sum was due and owing plaintiff from Motor Company; or, in no event under the terms of the instrument, is the guarantors' liability in excess of $1500. Plaintiff kept three "control" sheets (summaries of wholesale, retail and miscellaneous accounts receivable). The control sheets showed transactions of plaintiff and Motor Company practically at balance. It is urged by appellant Hesselberg that the control sheets, plaintiff's own records, prove the amounts alleged to be payable on accounts and loans had been paid and there was no loss to plaintiff. Plaintiff's assistant auditor, in his testimony, explained that the control sheets were used solely for accounting purposes; that amounts credited to the control sheets, whereby the accounts were brought to balance, did not necessarily indicate payments to plaintiff; and that credits, original entries, as shown on the ledge sheets, correctly evidenced the amounts which had been paid plaintiff. Certain credits shown on the ledge sheets and cancelled endorsements of notes were explained by plaintiff's vice-president. It was his testimony that sums equal to...
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