McClintock v. Ayers, 1344

CourtUnited States State Supreme Court of Wyoming
Writing for the CourtKIMBALL, Justice.
Citation253 P. 658,36 Wyo. 132
Decision Date01 March 1927
Docket Number1344
PartiesMcCLINTOCK v. AYERS ET AL. [*]

253 P. 658

36 Wyo. 132

McCLINTOCK
v.
AYERS ET AL. [*]

No. 1344

Supreme Court of Wyoming

March 1, 1927


Rehearing Denied April 26, 1927, Reported at: 36 Wyo. 132 at 156.

APPEAL from District Court, Converse County; CYRUS O. BROWN, Judge.

Action by T. E. McClintock, receiver of the Citizens' National Bank of Cheyenne, a corporation, with its principal place of business at Cheyenne, Wyo., against William L. Ayers and others. Judgment for defendants, and plaintiff appeals. Rehearing denied--See 245 P. 298, also 255 P. 355.

Reversed and Remanded.

W. C. Mentzer, for appellant.

The guaranty was signed by each of defendants and placed in the hands of one of defendants for delivery to the bank; it was delivered unconditionally to induce extention of credit and discounts for the Platte County State Bank; plaintiff bank relied thereon and discounted notes and advanced funds thereon to borrowing bank; defendants were stockholders and directors of Platte County State Bank and interested in its success; as such officers and directors, they knew that the guaranty had been delivered to plaintiff bank, thereby inducing it to discount paper for their bank; plaintiff bank would not have discounted said paper but for the execution and delivery of said guaranty; the foregoing propositions are clearly established by the evidence; the contract was more than one of mere guaranty and defendants are liable; Bank v. Cownie, (Ia.) 145 N.W. 904; Bank v. Gay, (Conn.) 17 A. 555; Trust Co. v. Evans, 188 F. 549; Mauran v. Bullus, (U. S.) 10 L.Ed. 1056; Stearns v. Jones, (Tenn.) 199 S.W. 400; Bell v. Bruen, (U. S.) 11 L.Ed. 89. Defendants' action in permitting plaintiff to extend credit, knowing that the guaranty had been delivered without additional signatures, estopped them from setting up this defense; White Co. v. Saxon, (Ala.) 25 So. 784; Baird v. Stephan, (N. D.) 204 N.W. 188; Surety Co. v. County, 194 F. 593; State v. Potter, 63 Mo. 212; Dair v. U.S. 21 L.Ed. 491; Hill Co. v. Grocery Co., (Tex.) 127 S.W. 1080; State v. Lewis, (N. C.) 21 Am. Rep. 461; Drovers' Co. v. Packing Co., (Kan.) 86 P. 128. There was either an unconditional delivery or a waiver of further signatures; Comstock v. Gage, 91 Ill. 328; Van Norman v. Barbeau, 54 Minn. 388; St. Louis Ass'n. v. Hayes, 97 F. 859. A conditional delivery must be made in escrow and to a third person; there can be no conditional delivery to an obligee or payee; Ins. Co. v. McMillan, 29 Ala. 147; Clanin v. Co., (Ind.) 3 L. R. A. 853; Carter v. Moulton, (Kan.) 32 P. 633; Lefkovits v. Bank, (Ala.) 44 So. 613; Moss v. Co., (U. S.) 3 L.Ed. 123; 16 Cyc. 572; Whitney v. Dewey, (Idaho) 80 P. 1117. An unconditional delivery will be presumed in view of the evidence; Bank v. Co., (Utah) 48 P. 402; Mullen v. Morris, 43 Nebr. 695; Chouteau v. Suydam, 21 N.Y. 179; Johnson v. Weatherwax, 9 Kan. 75; Roberts v. Greig, (Colo.) 62 P. 575; Christy v. Hammitt, (Colo.) 233 P. 831; Bank v. Burgwyn, (N. C.) 14 S.E. 623. The evidence fails to show any condition attached to the execution and delivery of the guaranty, by any of the defendants, and the defense is not available; Wadsworth v. Smith, 43 Ia. 439; Berkey v. Judd, 34 Minn. 393; Reed v. McGregor, 62 Minn. 94; Whitaker v. Richards, 134 Pa. 191; Shelton v. Michael, (Cal.) 160 P. 578; Russell v. Freer, 56 N.Y. 67; Hart v. Co., 53 Neb. 153; Mining Co. v. Bird, (Colo.) 44 P. 764; Edwards v. Bank, (Okla.) 201 P. 233; Ins. Co. v. Brooke, 51 Me. 506; Klemm v. Weil, (Ia.) 190 N.W. 388; Hall v. Bank, (Colo.) 220 P. 237; Merrill v. Muzzy, (Wash.) 39 P. 277; Mullen v. Morris, supra; Bank v. Boddicker, (Ia.) 75 N.W. 632; Machine Co. v. Simon, (Wis.) 80 N.W. 71; Flint v. Nelson, (Utah) 37 P. 479, affirmed in Nelson v. Flint, 166 U.S. 276; Doorley v. Lumber Co., (Kan.) 46 P. 195; Joyce v. Cockrill, 92 F. 838; Surety Co. v. Schmidt, 213 F. 199. Defendants are estopped; Dair v. United States, supra. The defense is not pleaded; Bank v. Co. (Utah) 165 P. 462; Sawyers v. Campbell, (Ia.) 78 N.W. 56; Davis v. Gray, 61 Tex. 506; Benson v. Gerlach, 4 N.Y.S. 273. It was the duty of the guarantors, and not of plaintiff bank, to have the guaranty executed in such manner that the obligations assumed would be those they intended to assume; Surety Co. v. County, 194 F. 593; Joyce v. Auten, (U. S.) 45 L.Ed. 332; McGregor v. Skinner, (Tex.) 47 S.W. 398. The Platte County bank had notice; Bank v. Purdy, 91 N.Y.S. 310; Bank v. Bryan, (W. Va.) 78 S.E. 400; Bank v. Ritz, (W. Va.) 74 S.E. 679; Bank v. Northrup, (Kan.) 109 P. 672; Bank v. Pierce, (Wash.) 33 P. 972; Securities Co. v. Mining Co., (Utah) 192 P. 664; Holm v. Bank, 84 F. 119, and cases cited. Notice of acceptance of the guaranty may be waived in the instrument; 28 C. J. 908. The guaranty is absolute on its face; 28 C. J. 815; Frost v. Herbert, 118 P. 1095. It is without limit as to time; 28 C. J. 961, and note 30. It was of a continuous character; 28 C. J. 961, 962; Bond v. Co., 172 F. 58; Bank v. Cancienne, (La.) 74 So. 267; Bradshaw v. Sibert, (Minn.) 158 N.W. 830. This court has authority to direct a judgment against defendants and in favor of plaintiff; 5897 C. S. 1920.

Kinkead, Ellery & Henderson, for respondents.

Appellant apparently submits the case on the sole proposition that the court below erred in overruling his motion for judgment notwithstanding the verdict; it is not claimed that the lower court erred in not granting plaintiff a new trial; it is not error to deny a motion that cannot be allowed in the form as presented; Mitter v. Coal Co., 28 Wyo. 439-446; 28 Cyc. 17; Cash Register Co. v. Merrigan, (Minn.) 181 N.W. 585; Wyman-Partridge & Co. v. Bible, (Minn.) 184 N.W. 45; hold that where a party asks, not for a new trial but only for judgment notwithstanding the verdict, the only question is whether the evidence is conclusive against the verdict; see also, Northwestern etc. Co. v. Williams, (Minn.) 151 N.W. 419; Bragg v. Ry. Co., (Minn.) 83 N.W. 511; Helmer v. Sheblin, 151 N.W. 421. Appellant has not brought himself within the provisions of Section 5897 C. S. ; Campbell v. Weller, 25 Wyo. 83; Cruikshank v. Ins. Co., 77 N.W. 958; Bennett v. Ry. Co., (Minn.) 131 N.W. 1066; Meehan v. Ry. Co., (N. D.) 101 N.W. 183. To justify such judgment, the record must show that the verdict was not justified by the evidence, and that a different result would not probably follow a new trial; Richmire v. Co., (N. D.) 92 N.W. 819; Indemnity Co. v. Schroeder, (N. D.) 95 N.W. 436. Where an apparent insufficiency of proof might be supplied, denial of the motion is proper; 33 C. J. 1185. Where defects in pleadings are cured by a verdict, the motion will not be granted; Merritt v. Cravens, (Ky.) 181 S.W. 970; Bank v. Kelly, (N. D.) 152 N.W. 125; Lydon v. Bank, 235 P. 27; 33 C. J. 1182. Under Section 5897 C. S., a motion for directed verdict must precede motion for judgment notwithstanding the verdict; Jones v. Ry. Co., 23 Wyo. 148; Richmore v. Co., supra; Campbell v. Weller, supra. Estoppel, not having been pleaded, a discussion of the law of estoppel seems unnecessary; if the guaranty was delivered upon condition, and knowledge of such condition was brought home to the obligee at the time of delivery, the contract was not effective until condition was complied with; and the fact that the contract was found in the possession of the obligee became, and was, immaterial; parol evidence is admissible to show that a contract was delivered, to become binding, only upon the performance of a condition or the happening of some contingency; 9 Enc. of Ev., 494; Cavanaugh v. Beer Co., (Ia.) 113 N.W. 856; Manville v. Weaver, (Wash.) 102 P. 36; O'Fallon Supply Co. v. Tagaliaferro, (N. M.) 224 P. 394. The other surety, who should have signed, was named as one of the sureties in the bond, a circumstance which placed the obligee upon inquiry; this agreement was referred to in the evidence as a "director's guaranty", and the president of appellant bank had told respondents that it was to be signed by all of the directors; the obligee had constructive notice of the agreement; Husack v. Clifford, 100 N.E. 466. Notice to the president was notice to the obligee; Henry v. Cartwright, (N. M.) 89 P. 309; Palling v. U.S. 2 L.Ed. 601. A bond incomplete on its face, suggesting nonperformance of some condition imposed by the surety, gives notice to the obligee and relieves the surety; Darr v. U.S. 16 Pallace 1, 21 L.Ed. 491. The failure of Stone to sign, put the bank upon inquiry as to whether or not a condition was imposed that Stone sign; Bank v. Boddicker, (Ia.) 75 N.W. 632; 28 C. J. 914. Parol evidence is admissible to establish that a surety or guarantor signed an obligation on condition that it should not be delivered or be binding until signed by others, and delivery without compliance with such condition is ineffectual to give validity to the agreement; Clark v. Williams, (Minn.) 62 N.W. 1125; Trust Co., v. Crane, 168 N.Y.S. 639; Pearsell Co. v. Jefferies, (Mo.) 105 Am. St. Rep. 496; Bank v. Barrmon, (Ill.) 16 N.E. 210; Bank v. Co., 48 P. 402; Burk v. Dulaney, (U. S.) 38 L.Ed. 698; Ware v. Allen, (U. S.) 32 L.Ed. 563; Machine Co. v. Simon, (Wis.) 80 N.W. 71; Campbell Printing Press v. Powell, (Tex.) 14 S.W. 245; Smith v. Kirkland, (Ala.) 1 So. 276; Goff v. Bankston, 35 Miss. 518; Rothsten v. Weeks, 195 N.W. 49. Where a bond contained names of other obligors than those signing the same, and is delivered without the signature of all, or where the obligee had knowledge that would put him on inquiry, if pursued, the burden of proof is upon obligee to show that delivery to him was by consent of those signing it; Novak v. Pitlick, 94 N.W. 916. Such is the rule in Nebraska, New Jersey and Massachusetts, and it apparently stands unquestioned by a court of last resort in any other state; the question of estoppel, and whether the contract could be delivered in escrow, is not involved in this case.

W. C. Mentzer, in reply.

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1 practice notes
  • State ex rel. Howell v. Bank of Glenrock, 1291
    • United States
    • United States State Supreme Court of Wyoming
    • March 1, 1927
    ...small compensation and because his appointment had been recommended by a committee of the creditors as well as a number of the depositors [36 Wyo. 132] and interested parties individually. His appointment was deemed to be the most advisable under the circumstances. The receiver is under the......
1 cases
  • State ex rel. Howell v. Bank of Glenrock, 1291
    • United States
    • United States State Supreme Court of Wyoming
    • March 1, 1927
    ...small compensation and because his appointment had been recommended by a committee of the creditors as well as a number of the depositors [36 Wyo. 132] and interested parties individually. His appointment was deemed to be the most advisable under the circumstances. The receiver is under the......

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