New Home Sewing-Mach. Co. v. Simon

• Decision Date: 25 September 1900
• Citation: 107 Wis. 368,83 N.W. 649
• Parties: NEW HOME SEWING-MACH. CO. v. SIMON.
• Court: Wisconsin Supreme Court

107 Wis. 368

83 N.W. 649

NEW HOME SEWING-MACH. CO.

v.SIMON.

Supreme Court of Wisconsin.

Sept. 25, 1900.

Appeal from circuit court, La Crosse county; O. B. Wyman, Judge.

Action by the New Home Sewing-Machine Company against Mathias Simon on a guaranty. From a judgment in favor of plaintiff, defendant appeals. Reversed.

Action to recover on a guaranty which is as follows:

“La Crosse, Wis., August 27th, 1897.

To the New Home Sewing-Machine Company, Chicago, Ill. Gentlemen--For and in consideration of your company supplying R. L. C. Holbek, of La Crosse, in the county of La Crosse, in the state of Wisconsin, with sewing machines and articles connected therewith, on credit, I do hereby guaranty the payment to you of the price and value of said goods at maturity, to an amount not to exceed two thousand dollars ($2,000.00), and whether the same be due on open account or by note or acceptance, and you are hereby authorized to grant such delay as you may see fit, for the payment of any sum which may be due you at any time, and this shall be held as continuing security in your favor until further notice from me, and to cover any and all renewals of debts, notes or acceptances which may from time to time be made, and any interest or cost due thereon, and any balance which may at any time be due by said R. L. Holbek to your company.

Signed this 27th day of August, 1895.

Mathias Simon.”

The allegations of the complaint were, in substance, that plaintiff was entitled to recover the full sum mentioned in the letter of guaranty because of the default of the principal. The answer admitted the signature to the letter of guaranty and alleged that defendant signed it upon an agreement that another surety should be obtained thereto and that it should not otherwise be binding; that notice of the acceptance of such letter was never received; that by agreement between the principal named in the letter of guaranty and plaintiff, the liability under such letter was changed from $2,000 to $1,000, and that the alleged indebtedness of such principal, which, in any event, was covered by the guaranty, was much less than $2,000. The main question litigated on the trial was whether the letter of guaranty was conditionally signed to the knowledge of plaintiff, or whether it was modified as stated in the answer. Defendant testified that he signed the letter of guaranty with the express agreement that another surety should be obtained thereto, and that upon plaintiff's agent calling upon him to obtain an acknowledgment of the genuineness of his signature to such letter, he said to him: “When I signed that bond I signed with the distinct understanding that there was to be another bondsman before the delivery of the bond.” That evidence was disputed. Some letters were offered in evidence showing that prior to the conversation above mentioned, and after the letter of guaranty came to plaintiff's possession, it was agreed to limit the liability thereunder to $1,000, but it was thereafter agreed that the guaranty should stand as written. Such letters were received in evidence, their effect being limited to the question of conditional delivery. There was no evidence to show that defendant had any knowledge of the correspondence relating to a change in the contract of guaranty.

The court specially instructed the jury, at plaintiff's request, as follows: If you believe from the evidence “that plaintiff notified the defendant that it accepted the guaranty as signed, and that it would thereafter sell to Holbek on the faith thereof, and if you further find that it did thereafter sell to Holbek on the faith of such guaranty, then the defendant is bound by his contract of guaranty to the plaintiff to the extent of such balance as may be due the plaintiff for sewing machines or sewing-machine supplies furnished on the faith of such guaranty, not exceeding $2,000, with interest from the date when demand was made upon defendant for payment thereof. If defendant Simon did not intend to be bound by the letter of guaranty after acceptance thereof unless there was another surety thereon, it was his duty to notify plaintiff that he would not be responsible on said letter of guaranty unless another surety signed the same.”

The jury were further instructed, at plaintiff's request: “If you find that defendant did not notify plaintiff that another surety must be procured before he would be bound by the letter of guaranty, then he is bound under the letter to pay for Holbek's purchases within the terms of such letter of guaranty, after September 9, 1895, for a sum not to exceed $2,000, with interest thereon from the date demand was made for payment thereof, provided you further find that plaintiff notified defendant of its acceptance of the letter of guaranty, and that it would furnish sewing machines and sewing-machine materials upon the faith and strength of it.”

The court further instructed the jury, at plaintiff's request: “If you find that Simon said to plaintiff's agent September 9, 1895, ‘When I signed that bond and Holbek brought it in, I signed it with the distinct understanding that there should be another bondsman when delivered,’ it is for you to say whether or not this is sufficient notice, providing the conversation which the defendant Simon claims did occur, to inform plaintiff that he did not intend, on the 9th day of September, 1895, to be bound by this letter of guaranty, and in determining this question you should take into consideration all that occurred between these parties at this conversation.”

General instructions were given to the jury to the effect that if defendant Simon and plaintiff's agent understood, on September 9, 1895, that the letter of guaranty was to be a binding contract, plaintiff is entitled to recover. Further instructions were given as follows: “If you believe that Mathias Simon at the interview with plaintiff's agent on September 9, 1895, used the language he claims to have used, viz.: ‘When I signed that bond and Holbek brought it in, I signed it with the distinct understanding that there must be another bondsman when delivered,’ it is for you to say whether or not this language was sufficient to notify the plaintiff that he did not intend to be bound by the contract of guaranty, and in determining the question you should take into consideration the defendant's entire conduct and all other facts and circumstances in the case.”

Each of the above instructions was duly excepted to.

The jury were further instructed, at defendant's request, substantially as follows: “If the letter of guaranty was not designed to be a binding contract unless another signature thereto was obtained, and the plaintiff had notice of that fact or anything sufficient to put a reasonably prudent man on his guard in respect thereto, then the plaintiff cannot recover in this action.”“If the letter of guaranty was conditionally left with the principal, and notice thereof was given to the plaintiff before it extended credit to such principal, the former had no right to sell goods to the latter relying on the guaranty, unless there was something in the talk or conduct of the defendant on September 9th which would have warranted the agent in believing that defendant did not intend to insist upon the invalidity of the instrument. The fact that the agent then notified the defendant that the plaintiff would extend credit to Holbek did not call for any protestation from him that he would not be bound by the letter of guaranty. When knowledge came to the plaintiff, if it did so come, that the letter of guaranty had been wrongfully delivered, it had no right to ignore the fact. It proceeded thereafter at its peril, and, unless defendant is guilty of some act that would amount to estoppel, is without remedy.” Instructions requested by defendant's attorneys, that the agreement shown to have been made...