Lennox v. Murphy

• Decision Date: 31 May 1898
• Citation: Lennox v. Murphy, 171 Mass. 370, 50 N.E. 644 (Mass. 1898)
• Parties: LENNOX et al. v. MURPHY et al.
• Court: Supreme Judicial Court of Massachusetts

171 Mass. 370

50 N.E. 644

LENNOX et al. v. MURPHY et al.

Supreme Judicial Court of Massachusetts, Essex.

May 31, 1898

COUNSEL

H.F. Hurlbut and E.T. McCarthy, for plaintiffs.

John P Leahy, for defendants.

OPINION

HOLMES J.

This is an action on a guaranty, "to the extent of ten thousand dollars, on obligations contracted and to be contracted by Murphy Brothers with P. Lennox & Co. for a period of three years, with the understanding that P. Lennox & Co. give Murphy Brothers a permanent credit of at least twenty thousand dollars in leather for the above period of three years." The action is defended only by Patrick Murphy. At the trial in the court below, after the evidence was in, the judge directed a verdict for the defendant; and the case is here on a report, by the terms of which, if the ruling was wrong, judgment is to be entered for the plaintiffs. The grounds mainly urged in support of the ruling are want of consideration, and a failure to notify the defendant of the acceptance of the guaranty.

There was evidence that, before Patrick Murphy signed the guaranty one of the firm whose obligations were to be guarantied exhibited to him an instrument to be signed by the plaintiffs, and told him the contents of it, and told him also, that, if he would sign the guaranty, it would keep the speaker on his feet, and keep him going. The only reasonable inference from this and other evidence is that, in spite of the usual formula, "For one dollar and other considerations," the guaranty in fact was executed in consideration of the plaintiffs' signing the other instrument referred to, and that Patrick Murphy understood when he signed that, if he signed, the plaintiffs would sign. The plaintiffs signed as expected.

The instrument executed by the plaintiffs was as follows:

"For one dollar and other considerations, we, P. Lennox & Co., guaranty Murphy Brothers a permanent credit for three years to the amount of twenty thousand dollars, in leather, and agree that Murphy Brothers shall not owe P. Lennox & Co. less than twenty thousand dollars at any time during this period, except at their own option; and Murphy Brothers agree to buy leather from P. Lennox & Co. to the extent of at least twenty-five thousand dollars per annum; and P. Lennox & Co. agree to sell Murphy Brothers as cheap as any reliable shoe manufacturer. This agreement to be null and void in case Murphy Brothers become insolvent during this period. P. Lennox & Co."

When this paper was signed, the consideration was furnished; and the offer in the defendant's instrument became a contract, unless some one of the objections which we shall mention bars the way. The gravest of these is that the plaintiffs' undertaking does not satisfy the stipulation in the defendant's guaranty. The guaranty calls for a permanent credit of at least $20,000 for three years. The plaintiffs' agreement contains a statement that Murphy Bros. agree to buy leather to the extent of at least $25,000 per annum; and it might be held that the failure of Murphy Bros. to buy to that extent would excuse the plaintiffs from their undertaking, or, in other words, that Murphy Bros.' performance of their agreement is introduced as a condition into an undertaking to do what is called for unconditionally by the guaranty. It may be that this objection would be fatal if the guaranty had called in the same terms for a counter agreement not yet framed. But, as we have said, in fact the words were an abbreviated reference to a paper already in existence, although not yet signed. It is plain that the words of the guaranty need construction. It is not to be supposed that the giving of credit for three years is contemplated as the consideration, for that would leave the guarantors unbound until the three years had elapsed. The consideration must be a promise to give credit. But the operation of the promise as consideration has to be proved by the evidence outside the writing. The words, on their face do not go further than to state a condition, if they do that. Curtis v. Hubbard, 6 Metc. (Mass.) 186, 191, 192. The question is whether, in that aspect, they do not state an absolute condition,--whether they are open to explanation from the circumstances. We are of opinion that the circumstances may be considered in aid of the interpretation. The words, "with the understanding," when read in connection with the facts, refer to an understanding already reached and put in writing,--a counter agreement by the plaintiffs with the partners guarantied. This counter agreement is...