Manry v. Waxelbaum Co.

• Decision Date: 14 June 1899
• Parties: MANRY v. WAXELBAUM CO.
• Court: Georgia Supreme Court

33 S.E. 701

108 Ga. 14

MANRY v. WAXELBAUM CO.

Supreme Court of Georgia

June 14, 1899

Syllabus by the Court.

1. This court cannot consider an assignment of error based upon a refusal to allow a witness to answer certain questions, when it does not appear what the answers would have been.

2. Portions of the answer which were stricken attempted merely to construe a written contract, which was a matter for the court; and the allegations of fraud contained in certain other portions were too loose and general to raise an issue of fraud, there being no denial of the execution of the instrument sued on.

3. The defendant made the following contract with the plaintiff "For and in consideration of the sum of one dollar in hand paid, and the receipt of which is hereby acknowledged I, J. H. Manry, do hereby guaranty the prompt payment of all accounts and notes given in settlement for goods purchased by G. W. Grubbs, of Bethel. Georgia, from the Waxelbaum Company of Macon, Georgia, to the extent of four hundred dollars. Be it further understood that I, J. H. Manry, shall be at liberty to withdraw this guaranty at any time, provided that the account of G. W. Grubbs is paid." Held, that this was a continuing guaranty.

4. It was not necessary for the creditor, before extending credit to the principal debtor on the faith of such a guaranty, to notify the guarantor of the acceptance of his undertaking.

5. There was no error in directing a verdict against the defendant for $400, but it was error to direct that interest be added at the rate of 8 per cent. per annum from the maturity of the indebtedness of the principal debtor. The plaintiffs were entitled only to interest at 7 per cent. from the date of the filing of the suit, no demand having been made prior to that time. Direction is given that the verdict and judgment be amended as above indicated, and that the costs of this writ of error be taxed against the defendant in error.

Error from superior court, Randolph county; H. C. Sheffield, Judge.

Action by the Waxelbaum Company against J. H. Manry. Judgment for plaintiff, and defendant brings error. Affirmed with direction.

Arthur Hood and Harrison & Bryan, for plaintiff in error.

W. C. Worrill, for defendant in error.

COBB J.

The Waxelbaum Company brought suit against Manry upon an instrument of which the following is a copy: "Georgia, Randolph County. For and in consideration of the sum of one dollar in hand paid, and the receipt of which is hereby acknowledged, I, J. H. Manry, do hereby guaranty the prompt payment of all accounts and notes given in settlement for goods purchased by G. W. Grubbs, of Bethel, Georgia, from the Waxelbaum Company, of Macon, Georgia, to the extent of four hundred dollars. Be it further understood that I, J. H. Manry, shall be at liberty to withdraw this guaranty at any time, provided that the account of G. W. Grubbs is paid. [Signed] J. H. Manry." It was alleged in the petition that G. W. Grubbs was dead, and that his estate was insolvent, and that at the time of his death he was indebted to the plaintiff for goods bought in a sum exceeding $400. The defendant filed an answer, in which he alleged that goods to the amount of $400 were sold Grubbs by the plaintiff on the faith of defendant's guaranty, and that these goods were paid for by Grubbs; that defendant only intended by the guaranty to be responsible for this amount, and did not intend that his contract should be a continuing guaranty that, if the written instrument given plaintiff by him contains any such stipulation, it is a fraud on him, and contrary to his undertaking; that defendant is advised that the estate of Grubbs is insolvent, but believes there will be something in the estate to pay on all notes due and owing by the estate; that defendant owes the plaintiff nothing on the contract sued on. The plaintiff demurred to so much of the defendant's answer as sought to deny liability on the contract, upon the ground that it was insufficient in law, and to those parts of the answer which sought to set up fraud, upon the ground that the same set forth no specific charges of fraud and were insufficient in law. The court sustained the demurrer, and the defendant excepted.

It appears from the evidence that Grubbs, at the time of his death, owed plaintiff $477.23, $35.42 of which was on open account, and the balance consisting of two promissory notes for $241.81 and $200, due October 1 and 15, 1897, respectively. It further appears that, before selling Grubbs any goods, the plaintiff had a correspondence with him, which culminated in a proposition from it to accept Manry as Grubbs' guarantor. This proposition was satisfactory to both Grubbs and Manry, and the instrument above quoted was sent by the latter to the plaintiff some time during the latter part of January, 1896. No notice of the acceptance of this guaranty was given by the plaintiff to Manry, and no notice of a desire to withdraw the same was ever sent by him to it. Since the date of the execution of the guaranty, Grubbs paid the plaintiff $253.52. The plaintiff sold the goods for the payment of which suit is brought entirely upon the faith of the promise of Manry to become responsible therefor. At the conclusion of the evidence, the court directed the jury to return a verdict for the plaintiff for $400 principal, with interest from October 15, 1897, at 8 per cent. per annum. The defendant brings his bill of exceptions to this court complaining that the judge erred in sustaining the demurrer to those parts of the answer above referred to, and in directing a verdict in favor of the plaintiff, and in allowing interest on the sum sued for at the rate of 8 per cent. per annum. The bill of exceptions also assigns error upon the refusal of the court to permit the defendant to answer certain questions propounded to him by his counsel, but what would have been the answers to these questions does not appear.

1. The question of practice ruled in the first headnote has been repeatedly ruled by this court, one of the more recent cases being Cook v. Association, 104 Ga. 814, 30 S.E. 911.

2. There was no error in striking those parts of the defendant's answer which were the subject of the plaintiff's demurrer. The parts stricken sought to construe the instrument sued on. What was the meaning of this instrument was a question to be decided by the court, and therefore the construction which the defendant relied upon was not the proper subject for plea. As to the allegations of fraud contained in the answer, it is sufficient to say that they did not specifically deny the execution of the instrument sued on, but alleged, in effect, that the defendant did not intend to make a continuing guaranty, and that, if the instrument really contained any such a stipulation, it was a fraud on him. These allegations were entirely too loose and general to raise an issue of fraud. They nowhere allege that the defendant was overreached in any way or that any misrepresentations were made to him by the plaintiff whereby he was induced to sign the instrument. The words of the instrument are plain and unambiguous, and there was no allegation that the defendant was ignorant of the meaning of the ordinary English words in which it is couched.

3. It is contended that the contract sued on in this case is one of "suretyship," and not of "guaranty." The two terms are frequently used interchangeably, and for this reason a great confusion has arisen in the books as to the proper distinction to be drawn between them. A guarantor is a surety, in the sense that he obligates himself to pay the debt of another, but at the same time there is a very clear distinction between them. One difference is pointed out by our Code. It says that a contract of suretyship "differs from a guaranty in this: that the consideration of the latter is a benefit flowing to the guarantor." Civ. Code, § 2966. See, also, opinion of Bleckley, J., in Wright v Shorter, 56 Ga. 76. In brief, we understand the difference to be this: A surety binds himself to perform, if the principal does not, without regard to his ability to do so. His contract is equally absolute with that of his principal. They may be sued in the same action, and judgment may be entered up against both. A guarantor, on the other hand, does not contract that the principal will pay, but simply that he is able to do so; in other words, a guarantor warrants nothing but the solvency of the principal. Before an action can be maintained against a guarantor, therefore, it must be shown that the principal is unable to perform. The surety says to the creditor: "If your debtor will not pay, I will pay." The guarantor says to him: "Proceed first against the principal, and, if he should not be able to pay, then you may proceed against me." It has been said that there is no instance in the books of a guarantor contracting jointly with his principal. Much has been written upon this subject, but we think the above expresses the true distinction between the two classes of contracts. See Reigart v. White, 52 Pa. St. 438; McMillan v. Bank, 10 Am. Law Reg. 431, and notes to that decision; Kramph's Ex'x v. Hatz's Ex'rs, 52 Pa. St. 525; notes to Birdsall v. Heacock, 18 Am. Law Reg. 751; 9 Am. & Eng. Enc. Law (1st Ed.) 68, and cases...