Manufacturers' Finance Co. v. Rockwell
| Decision Date | 18 March 1932 |
| Citation | 278 Mass. 502,180 N.E. 224 |
| Parties | MANUFACTURERS' FINANCE CO. v. ROCKWELL. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Exceptions from Superior Court, Suffolk County; Pinanski, Judge.
Action by the Manufacturers' Finance Company against Robert R. Rockwell. Verdict for plaintiff, and defendant brings exceptions.
Exceptions overruled.H. J. Barrett and J. A. Lyons, both of Boston, for plaintiff.
E. C. Park, of Boston, for defendant.
This is an action on a guaranty. The contract guaranteed was executed by the Rockwell Lumber Company of Cleveland, Ohio, and the plaintiff. The guaranty was executed on the same date by the defendant, then the president of the lumber company, and by one McIntyre, then its treasurer, as guarantors.
There is no dispute that there has been a breach of the contract between the plaintiff and the Rockwell Lumber Company; and that, if liability exists, the amount due is $62,235.40 with interest. The questions requiring our decision are whether the liability of the defendant terminated with the receipt by the plaintiff of a letter which the jury found was mailed by the defendant on August 3, 1927, and received by the plaintiff shortly thereafter; and whether, as a guarantor, the defendant was released in consequence of the execution of a contract by the plaintiff, between itself, the Rockwell Lumber Company, McIntyre and his wife on April 28, 1928.
The contract of guaranty provided that ‘the liability hereunder is and shall be direct and in all respects unconditional, and shall continue until said Manufacturers' Finance Company receives written notice revoking said liability as to future transactions.’ It was a binding contract upon a present consideration, and could be terminated only upon compliance with its terms. Zimetbaum v. Berenson, 267 Mass. 250, 254, 166 N. E. 719. The defendant resigned as an officer of the Rockwell Lumber Company on August 3, 1927, and disposed of all the stock which he held in it. Since then he has not been connected with it. At that time, he wrote to the plaintiff: ‘Effective this date my resignation as president and a director of the Rockwell Lumber Company has been accepted and I have severed all connection and interests in that company.’ This is the revocation relied upon. In the opinion of a majority of the court it is not a sufficient notice to terminate his liability. Assuming, what the plaintiff denies, that it received such a letter, it does not state the intention no longer to be liable for future transactions under the contract guaranteed with sufficient distinctness to affect the plaintiff with the notice to which it was entitled. For all that was stated, he might still be understood to be bound by his guaranty. Liability as guarantor was not conditioned by a status as office holder, stockholder, or employee of the lumber company. This status is all that the letter dealt with. There was nothing set out incompatible with a continued liability as guarantor of the company's performance of its contract with the plaintiff. The written contract of guaranty bore at its head in large letters: ‘The following Guaranty and Waiver Is To Be Signed By Individuals.’ It made clear the relation assumed did not depend upon corporate interest.
The testimony of the plaintiff's secretary that if he had received such a letter he should have thought the writer ‘wanted * * * to get out’ of his future liability, and would have replied that the plaintiff ‘insisted on his staying on,’ far from showing that the notice was sufficient, emphasized its insufficiency. The plaintiff was helpless against a proper notice. It could not legally reject a sufficient notice and deprive the defendant of his contract right to put an end to liability for future transactions. See R. H. White Co. v. Jerome H. Remick & Co., 198 Mass. 41, 84 N. E. 113;William Filene's Sons Co. v. Lothrop, 243 Mass. 214, 137 N. E. 255.
The contract of April 28, 1928, dealt with a situation which arose after the defendant left the lumber company, and of which he had no full knowledge till shortly before the trial. In violation of the contract of September 23, 1925, certain things took place, which exposed McIntyre to prosecution. By the provisions of the April contract the plaintiff agreed among other...
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