McConnon & Co. v. Mench

• Decision Date: 22 July 1926
• Docket Number: No. 136.,136.
• Citation: 209 N.W. 830,235 Mich. 640
• Parties: McCONNON & CO. v. MENCH et al.
• Court: Michigan Supreme Court

235 Mich. 640

209 N.W. 830

McCONNON & CO.

v.MENCH et al.

No. 136.

Supreme Court of Michigan.

July 22, 1926.

Error to Circuit Court, Hillsdale County; Guy M. Chester, Judge.

Action by McConnon & Co. against Irving Mench, Ralph W. Smith, and C. W. Welden. From judgment for defendants Smith and Welden, plaintiff appeals. Affirmed.

Argued before the Entire Bench.

W. D. Grommon, of Hillsdale, for appellant.

Paul W. Chase, of Hillsdale, for appellees Smith and Welden.

WIEST, J.

Defendant Irving Mench had the right to sell extracts, medicines, and other articles of merchandise, purchased of the Saginaw Medicine Company, within a specified territory. Desiring to continue such sales for another year, and being indebted to the Saginaw Medicine Company in the sum of $1,170.52, he received a contract prepared by the company and was required to obtain sureties. The contract so prepared by the company, as found by the jury, stated:

‘The indebtedness due at the date of this agreement from the party of the second part to said company, for goods and other articles sold and delivered to him under a prior agreement, is hereby mutually agreed to be the sum of * * * dollars, which sum and indebtedness the second party hereby promises and agrees to pay during the term of this agreement, and payment of which is hereby extended to such time.'

Defendants Smith and Welden signed a guaranty reading as follows:

‘In consideration of the sum of one dollar to us severally in hand paid by Saginaw Medicine Company, the receipt whereof is hereby acknowledged, and the execution of the within agreement, by said company and the sale and delivery by it to the party of the second part, of its medicines, extracts and other articles, the extension of the time of payment of the indebtedness due from him to said company and therein provided, we, the undersigned sureties, do hereby jointly and severally promise and guarantee the full and complete payment of said indebtedness and for said medicines, extracts, and other articles at the time and place and in the manner as in said agreement provided.'

The Saginaw Medicine Company sold its business and transferred to plaintiff its claim against Mench, Smith, and Welden. This suit was brought to recover the amount of Mench's debt due at the time the guaranty was signed. Defendants Smith and Welden, under notice attached to the plea, claimed there was a material alteration made in the guaranty they signed, by way of inserting in the blank space in the contract the amount of the past-due indebtedness of Mench. Plaintiff claimed such sum was in the contract when signed by Smith and Welden. The jury found the amount of Mench's debt was written in the contract after the same was signed by Smith and Welden and without their knowledge or consent. In the circuit judgment passed for defendants Smith and Welden on the ground that they were released by reason of a material alteration in their contract of guaranty. It appears Mench actually owed the amount claimed by plaintiff.

We must accept the finding of the jury that, at the time the guaranty was signed, the amount of Mench's indebtedness was not stated in the contract. Was it a material alteration of the contract to insert therein the amount of such indebtedness? The authorities are not in accord on this question. The common-law rule was to the effect that any alteration was deemed material and released the guarantors. The rule of the common law has been relaxed to some extent, but we are not prepared to go along with the decisions holding that such an alteration as here found is not a material one. The purpose of inserting the amount of the past-due debt of the principal, after signatures of the guarantors, is apparent as well as the reason for not having the amount in plain view of the guarantors at the time of signing. Two purposes are served if the amount may be written in after execution and both are to the disadvantage of the guarantors; one admits of the principal making a representation false in fact, and by the writing to lead the guarantors to believe there is no past-due indebtedness because the space left for it is unfilled, and the other permits the inserted amount to stand as primary evidence of the obligation. We do not think the door should be opened to such possible deception and unfair employment of the alteration as evidence of the state of the account.

In the course of our examination, we have noticed many cases like the one at bar. Such an alteration, if countenanced, may be studied one intended to either entrap the guarantors or bring into play a rule of evidence not otherwise available.

In J. R. Watkins Co. v. Fornea, 135 Miss. 690, 100...