Merchants' National Bank of Omaha v. Ayers

• Decision Date: 04 October 1927
• Docket Number: 1364
• Citation: 37 Wyo. 136,259 P. 804
• Parties: MERCHANTS' NATIONAL BANK OF OMAHA v. AYERS [*]
• Court: Wyoming Supreme Court

259 P. 804

37 Wyo. 136

MERCHANTS' NATIONAL BANK OF OMAHA v. AYERS ^[*]

No. 1364

Supreme Court of Wyoming

October 4, 1927

APPEAL from District Court, Laramie County, HARRY P. ILSLEY, Judge.

Action by the Merchants' National Bank of Omaha, Neb., against W. L. Ayers. Judgment for defendant, and plaintiff appeals.

Reversed and Remanded.

J. E Jacobson, of Wheatland, for appellant.

Knowledge acquired by the bank and Mr. Cooper was knowledge of the defendant Ayers. Comm. B. & T. Co. v. Hauf, 230 P 539 (Wyo.) , 21 R. C. L. 838, 31 Cyc. 1587. Evidence of an alleged collateral agreement, affecting the guaranty, cannot be received for the purpose of varying its terms. 22 C. J 1248, Sec. 4719 C. S.; Stickney v. Hughes, 12 Wyo. 404; George v. Emery, 18 Wyo. 360; Clerk v. Russell, 3 Dall. 415. The construction of written instruments belongs to the court, 6 R. C. L.. 862. Where notice in writing is required for revocation, no notice of acceptance is necessary, Bank v. Packing Co., 111 P. 575 (Calif.) ; Birken v. Tapper, 189 N.W. (S. D.) 698; Wall v. Eccles, (Utah) 211 P. 704; Deering v. Mortell, 16 L.R.A. (N.S.) 359, and cases cited. Defendant was requested by plaintiff bank to execute the guaranty which was given in response to this request, Davis v. Wells Fargo Co., 194 U.S. 159; this dispensed with notice of acceptance. Bank v. Andrews, 205 N.W. 732. The guaranty being absolute, defendant's liability became fixed upon non-payment of the debt, without pursuing the principal debtor; Company v. Bryan (Calif.) 200 P. 823; Bank v. Co., 263 S.W. 54; Bank v. Schirmer, 159 N.W. 800; Bank v. Co., (Minn.) 200 N.W. 851.

Kinkead, Ellery & Henderson, for respondent.

The plaintiff prescribed the form of contract, and if there is any ambiguity, it must be resolved against the plaintiff. Cochran v. Kennedy, 10 Daley (N. Y.) 346; Peck v. Peck, (Wis.) 103 N.W. 5. The instrument must be construed in favor of the guarantor. 28 C. J. 932; Hartman v. Hartman, 160 N.W. 295. The apparent purpose of the guaranty was to enable the State Bank to borrow up to the limit of $ 50,000, which was in excess of the amount permitted by statute, 5143 C. S. A contract in violation of a statute is not enforceable. Gould v. Co., 17 Wyo. 507; Bank v. Bank, 300 F. 945; Fidelity Assn. v. Shea, (Idaho) 55 P. 1022; Dennison v. Gibson, 243 Mich. 186; Brick Co. v. Ry. Co., 154 F. 929; Utah Co. v. St. Louis Const. Co., 254 F. 324; Central Ry. Co. v. Pipe Line Co., 1 Fed (2nd) 868. Where the object is to do an illegal act, the agreement is void, Sayres v. Decker, (N. Y.) 145 N.E. 744; McCormick v. Bank, 165 U.S. 638, and relieves a surety, Levy v. Wise, 15 La. Ann. 38; and defendant cannot be estopped to plead its illegality. Roberts v. Criss, 266 F. 296; Handy v. Publishing Co., (Minn.) 41 N.W. 188; Standard Assn. v. Aldrich, 163 F. 216, 10 L.R.A. (N.S.) 393; Smith v. Rennicks, (N. D.) 204 N.W. 843; Bank v. Kennedy, 167 U.S. 367; De LaVergne Co. v. German Inst., 175 U.S. 59; Ry. Co. v. Pipe Line Co., 1 F. (2nd) 866. Contracts prohibited by statute cannot be enforced. Dukam v. Streator, (Ill.) 146 N.E. 550; Workingmen's Banking Co. v. Rautenberg, 103 Ill. 416; Ank v. Armstrong, 152 U.S. 346. The question of the sufficiency of the evidence can only be considered in connection with a motion for a directed verdict. The exceptions to instructions are insufficient. C. & N.W. Ry. Co. v. Ott, 237 P. 238. There was no question of agency between Ayers and the Platte County State Bank. Ayers signed the guaranty upon condition that another would also sign. This condition could not be waived for him by the Platte County State Bank. The case of Bank v. Packing Co., 111 P. 575, has no application on the facts here as appears from the language of that opinion. This case should be distinguished from cases in which no notice of acceptance by the guaranty is required. Davis v. Wells Fargo Co., 194 U.S. 159. The guarantee, as a matter of fact, refused to accept it with the condition attached, and not having accepted by the extension of credit, prior to having learned of the condition imposed by Ayers, there was no acceptance at all--no meeting of minds. Dearing v. Mortel, 16 L.R.A. (N.S.) 354; Royal v. Newton, (Utah) 239 P. 949; Cont. Supply Co. v. Smith, 241 P. 770; Ochler v. Cowley, (Okla.) 231 P. 539; Davis v. Richards, 115 U.S. 524. As to discounts, the instrument plainly states, that it was a guaranty of collection only, in which case the plaintiff could not recover under the facts in evidence.

KIMBALL, Justice. BLUME, Ch. J., and POTTER, J., concur.

OPINION

KIMBALL, Justice.

The Merchants National Bank of Omaha, Nebraska, plaintiff, sued W. L. Ayers, defendant, to recover the amount due on a promissory note discounted by the plaintiff for the Platte County State Bank of Wheatland, Wyoming. The case was tried to a jury and the verdict and judgment were for the defendant. The plaintiff appeals.

The defendant was sued as guarantor. He was one of the signers of the following written guaranty:

"WHEREAS, Platte County State Bank of the State of Wyoming, having its principal office at Wheatland in the County of Platte and State of Wyoming is desirous of maintaining a line of credit with THE MERCHANTS NATIONAL BANK of Omaha, Nebraska, and of borrowing money of said bank, and said bank has agreed to extend such credit upon the condition of the guaranty by W. L. Ayers, E. L. Rumsey, W. E. Sloan and W. S. Cooper residing at Wheatland, Wyo. of the prompt and full payment by said Platte County State Bank of all indebtedness now due or owing from said Platte County State Bank to the bank, or which may at any time hereafter be due or owing from said Platte County State Bank to said bank, during the period of the guaranty, and the prompt discharge of all of the liabilities to said bank, and the complete performance of all duties and obligations by said Platte County State Bank to be at any time performed, or owing, to said bank.

"THIS AGREEMENT WITNESSETH, That, for value received from said The Merchants National Bank, Omaha, Nebraska, and in consideration of the premises, and of the continuance of said line of credit, the said W. L. Ayers, E. L. Rumsey, W. E. Sloan, W. S. Cooper jointly and severally promise, agreed and undertake, to and with the said The Merchants National Bank, of Omaha, Neb., its successors and assigns, to indemnify and save harmless the said bank, from any loss, expense or damages by reason of any loans, discounts, credits or other accommodations already made or granted, or which may be hereafter made or granted, by said bank to said Platte County State Bank in an amount not exceeding Fifty Thousand Dollars and do hereby guarantee the full and prompt payment by said Platte County State Bank of all its indebtedness to said bank which now exists or which may be hereafter contracted, not exceeding said sum, and the complete discharge and performance by said Platte County State Bank of all its liabilities, duties and obligations to said bank which now exists or which may be hereafter incurred, hereby waiving any and all notice of loans made, defaults in payment, and of protest, and any and all other acts or things by said Bank to be done to establish the liability of the undersigned guarantors in the premises, and waiving presentment, demand and protest.

"This guaranty is understood to be a continuing guaranty to said bank, in the full sum aforesaid, until revoked by due notice in writing, signed by all guarantors, specifying the purpose of such notice and served personally on the cashier and on the president or vice-president of said bank, and this guaranty shall continue good and binding until all of the amounts owing from said Platte County State Bank to said bank, or on which it shall be liable to said bank, at the time of such notice, shall be paid, and shall bind the heirs, executors and administrators of said guarantors, and of each of them."

"In witness whereof, we have hereunto set our hands and seals this 29th day of November, 1919."

(Signed) Wm. L. Ayers

E. L. Rumsey

W. E. Sloan

W. S. Cooper.

The signers of this writing were all interested in the Platte County Bank. Ayers, the defendant, was president; Sloan and Rumsey were directors, and Cooper was cashier. The Platte County Bank frequently sent to the plaintiff commercial paper for rediscount, and the plaintiff required that such loans or discounts be guaranteed by persons interested in the Platte County bank. A previous guaranty given for that purpose had been signed by Daniel Miller, Sloan, Rumsey and Cooper, and that guaranty provided that all discounted paper should bear the personal endorsement of Cooper. In November, 1919, the defendant, Ayers, having acquired the interests of Miller, the plaintiff wrote Cooper, cashier of the Platte County bank, as follows:

"We have just received information that Mr. Miller has left the state of Wyoming and is now living in California. We are also informed that Mr. W. L. Ayers has purchased Mr. Miller's interests in your bank. If this information be correct it is certainly advisable that Mr. Ayers should execute to this bank a guaranty for the paper discounted by you acting for the bank. We have a guaranty executed in November 1918 signed by Dan Miller, E. L. Rumsey, W. E. Sloan and W. S. Cooper. I enclose herewith a couple of blank forms and we desire that a guaranty be sent us not exceeding $ 50,000.00 and to be signed by Mr. Ayers and the men associated with him in the institution."

One of the blank forms enclosed with the above letter was used in the preparation of the new guaranty which is quoted above. The blanks in the form were filled in at the Platte County bank, and the writing, signed by the defendant and others as heretofore shown, was...