Jarecki Mfg. Co. v. Hinds
| Decision Date | 25 March 1927 |
| Docket Number | (No. 247.) |
| Citation | 295 S.W. 274 |
| Parties | JARECKI MFG. CO. v. HINDS. |
| Court | Texas Court of Appeals |
Appeal from Eighty-Eighth District Court, Eastland County; Elzo Been, Judge.
Action by the Jarecki Manufacturing Company against W. S. Hinds. Judgment for defendant, and plaintiff appeals. Affirmed.
Turner, Seaberry & Springer, of Eastland, for appellant.
Sayles & Sayles, of Abilene, for appellee.
The appellant is engaged in the business of selling tools and other supplies for drilling oil wells at Eastland, Tex. On March 3, 1924, Robert D. Gordon applied to appellant to purchase a wire line for use in drilling or completing the drilling of a well on the Sneed farm near Eastland. Credit was denied him by appellant, whereupon Gordon informed appellant that the appellee, W. S. Hinds, who resided at Baird, Callahan county, Tex., would guarantee the payment of the price. The manager of appellant called appellee by long-distance telephone, and appellee agreed to guarantee such payment, but was informed by appellant's manager that such guaranty must be by telegram, as his instructions were not to accept an oral guaranty. Following this telephone conversation, the following telegram was sent by appellee to appellant:
"Baird, Texas, March 3, 1924
"Jarecki Mfg Co Eastland Tex I guarantee
payment five thousand ft wire line for J U
Johnson or R D Gordon not to cost over one
thousand fifty dollars W S Hinds"
After the receipt of this telegram, appellant delivered to Gordon a wire drilling line 4,500 feet in length, for which it charged 21¾ cents per foot. The account never having been paid, suit was instituted by appellant against appellee upon his guaranty, the petition alleging, as a reason for not joining Gordon in the suit, that Gordon was "hopelessly insolvent," and also that he was a nonresident of this state. The trial was before a jury, and at the conclusion of the testimony the court, at the instance of appellee, Hinds, and over the objection of appellant, instructed the jury to return a verdict in favor of appellee, upon which verdict so returned by the jury judgment was entered that appellant take nothing by its suit.
The question to be determined by this court is whether or not there was any evidence upon which the jury should have been permitted to pass. Appellant has briefed six assignments of error, and an understanding of our views of the questions raised can be arrived at only by a discussion of these various assignments.
By the first assignment of error appellant raises the question that the language of the telegram was ambiguous; that by its terms it guaranteed a line not to cost over $1,050, which language within itself, taken in connection with all of the facts and circumstances surrounding the execution of the telegram and the subsequent conduct of the parties with reference to the subject-matter, evidenced a clear intention by the parties that there should be some variation in price, and, by necessary implication, some variation in length; the price being figured according to length. Wherefore, it claims that it substantially complied with the conditions of the guaranty. This assignment calls for an examination of the language of the telegram itself.
When one person assumes to answer for the debt, default, or miscarriage of another, whether such assumption constitutes him a surety or a guarantor within the technical meaning of the two terms, his liability upon such undertaking can be fixed and preserved only by a strict compliance with the terms of the guaranty. It has been often said that he is a favorite of the law. His obligation does not extend one jot or tittle beyond what is "nominated in the bond." Smith v. Montgomery, 3 Tex. 199.
If the creditor and the principal debtor vary in any degree the terms of the contract, then a new contract has been formed, upon which new contract the surety is not obligated and cannot, therefore, be bound. Ryan v. Morton, 65 Tex. 258.
As to the principal debtor, liability may be extended by implication; but not so as to the guarantor. There is no implied liability upon the part of the guarantor, who did not receive the benefit of the contract. Nor is the rule altered by the fact that the guarantor was benefited by the change. To permit inquiry as to whether or not the guarantor was benefited by a change of contract would be, in effect, for the court to make his contract for him, and determine whether or not it was a wise one, and would lead into a vast variety of speculation. Lane & Saylor v. Scott & Culver, 57 Tex. 367.
These observations lead to the conclusion that, if the language of the telegram is unambiguous, then certainly appellee would not be bound thereby, because he guaranteed payment for a 5,000-foot line at a maximum cost of 21 cents per foot, and is being sued for the price of a 4,500-foot line at 21¾ cents per foot.
Without undertaking to give an accurate definition of the word "ambiguous," as used in connection with the construction of the language of a written contract, it unquestionably denotes that the language is susceptible of more than one meaning. If the language of this telegram is susceptible of more than one meaning, then other facts and circumstances surrounding the transaction should properly be considered by the court in arriving at the real intention of the instrument. In construing contracts of guaranty, as other written contracts, the intention of the parties is controlling; but their intention in the case of a contract of guaranty must be arrived at by the terms of the instrument itself, unless such terms are ambiguous. Appellant insists that this language is ambiguous, because some latitude in price was allowed. We cannot agree to this construction. The only latitude of price allowed was a maximum price fixed at 21 cents per foot. It would be difficult to imagine words less free from ambiguity than those expressing the length of the line to be sold. A 5,000-foot line means a line 5,000 feet in length; and to explain away that statement and read into it a guaranty of a line 4,500 feet in length, upon the theory that the language used was ambiguous, would, in our opinion, be a strained construction. Appellant failed in two important particulars to deliver the line described in the telegram of guaranty. The price was in excess of the maximum price fixed by appellee, and the length was materially less than that fixed by the telegram. A slight variation in the length might not have had the effect of changing the contract, but so material a variation as 500 feet in length is certainly not a substantial compliance with the contract.
The cases cited by appellant in support of this assignment most strongly sustaining their position are Cooper Grocery Co. v. Eppler (Tex. Civ. App.) 204 S. W. 338, and Menefee v. Bering Mfg. Co. (Tex. Civ. App.) 166 S. W. 365. In the Eppler Case, the guarantor, being a stockholder in the Eppler Mercantile Company, guaranteed a merchandise account of Eppler Mercantile Company, a corporation. After the letter of guaranty was written, the charter of the corporation expired, and a new charter was taken out under the same name; the corporate powers of the new corporation being in some respects enlarged. The wholesale house continued to sell to Eppler Mercantile Company after the new charter was procured. In a suit upon the guaranty, the guarantors defended on the ground that the letter of guaranty could not be held to cover debts due by a new corporation; that the new corporation was a separate and distinct entity from the original corporation, and no liability existed as to the account contracted after the new charter was granted. The question involved was merely whether or not the mere fact of a new charter and certain changes of powers under the charter constituted a new and separate entity. The Austin Court of Appeals, in an opinion by Special Judge Brady, held that the real intention of the parties was to cover the account of this particular concern, and that the obtaining of a new charter did not terminate the guaranty.
The case of Menefee v. Bering Mfg. Co., supra, is clearly distinguishable upon the facts and principles discussed from the case under consideration. Menefee sold the appellee a lot of railroad ties to be shipped to a certain place. He shipped about seventeen cars in excess of the amount ordered by the purchaser, who declined to receive them. The railroad company held these excess cars at the place of destination for the payment of freight, demurrage, and unloading charges. Finally the appellee wrote Menefee, suggesting that the best solution would be to pay these railroad charges and have the ties unloaded. In answer to the letter, Menefee wired the appellee as follows:
The appellee paid the freight, demurrage, and unloading charges. Menefee defended the suit for reimbursement on the ground that the telegram did not authorize the payment of demurrage charges. The court was clearly correct in holding Menefee liable for such charges. The principles of suretyship and guaranty do not apply to the facts of that case. The appellee was acting for the benefit of Menefee at his request, and the reason for the rule of strict construction of guaranty contracts would have no application. We have concluded that neither upon principle nor authority can the wording of the telegram under construction be construed to be ambiguous, and appellant's first assignment of error is therefore overruled.
The second and third assignments of error raise the question that the appellee...
To continue reading
Request your trial
-
Moore v. Conway
...193 S. W. 392; Queen v. Turman (Tex.Civ.App.) 241 S.W. 786; Dendinger v. Martin (Tex. Civ.App.) 221 S.W. 1095; Jarecki Mfg. Co. v. Hinds (Tex.Civ.App.) 295 S.W. 274; Daugherty v. Wiles (Tex.Com.App..) 207 S.W. 900; Walker v. Dawley (Tex.Civ. App.) 4 S.W.(2d) 159; Wachholder v. Paull (Tex.Ci......
-
Universal Metals & Machinery, Inc. v. Bohart
...S.W.2d 428 (Tex.1971). In McKnight, we quoted the statement of the rule by the late Chief Justice Hickman in his writing in Jarecki Mfg. Co. v. Hinds, 295 S.W. 274 (Tex.Civ.App.1927, writ dism'd, 6 S.W.2d 343): 'It has been often said that he (one assuming to answer for the debt of another)......
-
CONTINENTAL ILL. NAT. BANK & TR. CO. v. Windham
...874 (Tex.1976); Breach of warranty, Hurst v. Stith Equipment Co., 133 Ga.App. 374, 210 S.E.2d 851 (1974); Jarecki Mfg. Co. v. Hinds, 295 S.W. 274 (Tex. Civ.App.—Eastland 1927); Incapacity of principal, Bernstein v. Friedlander, 58 Misc.2d 492, 296 N.Y.S.2d 409 (Sup.1968); Statute of limitat......
-
U.S. v. Vahlco Corp.
...law issue need not be addressed because no conflict between Louisiana and federal law concerning guaranties).8 Jarecki Mfg. Co. v. Hinds, 295 S.W. 274, 275 (Tex.Civ.App.1927); accord McKnight v. Virginia Mirror Co., 463 S.W.2d 428, 430 (Tex.1971).9 Jarecki, 295 S.W. at 275; accord McKnight,......