Oehler v. Cawley

• Citation: 105 Okla. 59,231 P. 539,1924 OK 1109
• Decision Date: 09 December 1924
• Docket Number: Case Number: 14607
• Parties: OEHLER v. CAWLEY et al.
• Court: Oklahoma Supreme Court

1924 OK 1109

231 P. 539

105 Okla. 59

OEHLER v. CAWLEY et al.

Case Number: 14607

Supreme Court of Oklahoma

Decided: December 9, 1924

Syllabus

¶0 1. Guaranty--Requisites of Contract--Mutual Assent.

As in the case of other contracts, in order to constitute a contract of guaranty, the minds of the parties must meet in the same sense on the same proposition; or, as generally stated, there must be mutual assent to the terms of the guaranty. C. J., vol. 28, page 898.

2. Same--Lack of Assent to Conditions--Invalidity of Contract.

Where an action is based upon a contract of guaranty, and the contract as pleaded by the plaintiff consists of a written instrument signed by the guarantors guaranteeing payment of numerous creditors' claims, in monthly installments, extending from June to December, inclusive, upon condition of extensions of time and acceptance of the creditors having the majority of the indebtedness, and an instrument in writing signed by the said creditors accepting the contract of guaranty, and adding the words as follows: "With the understanding that in default of the payment of any installment at maturity then and in that event Denny Cawley shall transfer all of his properties and holdings to V. E. Oehler, as trustee, or the benefit of all his creditors to be shared pro rata in proportion to their claims. Should it become necessary for Denny Cawley to assign his properties to V. E. Oehler as trustee, then the said trustee shall have authority to first realize on said assets before proceeding to collect from John J. Cawley or Patrick B. Cawley," and a demurrer is sustained to the petition on the ground that the contract is invalid because the added conditions in the notice of acceptance were material and not agreed to by the guarantors, held, the order sustaining the demurrer not erroneous, and the judgment is sustained.

Davis & Frazier, for plaintiff in error.

Simons, McKnight & Simons, for defendants in error.

THREADGILL, C.

¶1 The action involves a guaranty contract. Denny Cawley was the debtor and his creditors were the guarantees, John W. Cawley and Patrick B. Cawley were guarantors, and V. E. Oehler was trustee. Denny Cawley was conducting a mercantile business in Ranger, Tex., and in 1920, and sometime prior thereto, under the name of Cawley Brothers, had become somewhat embarrassed in meeting his obligations and keeping up his credit. His two brothers, defendants in this action, living in Creek county, Okla., undertook to make a contract with the creditors of their brother, Denny Cawley, to etend his credit, and on May 12, 1920, they executed the following instrument of writing to said creditors:

"To the creditors of Cawley Bros., Ranger, Texas, Denny Cawley, Proprietor:

"Our brother advises us that at this date his assets total $ 97,763.57, and his indebtedness, $ 58,207.30, and though his assets are considerably more than his liabilities he finds he is unable to properly liquidate his indebtedness without the assistance and cooperation of his creditors; therefore, we, his brothers, for and in consideration of the sum of one dollar, the receipt of which is hereby acknowledged, and for the further consideration that you extend time of payment of your account against the Ranger store, do hereby guarantee payment of any sum that he may be owing you providing, however, that creditors representing the majority of the indebtedness agree to extend the time of payment of such indebtedness payable as follows: 10% June 20th, 10% August 20th, 15% September 25th, 20% October 25th, 20% November 25th, 25% December 25th, 1920, and furthermore, that this contemplated extension becomes effective. Upon the extension becoming operative, six notes will be executed to V. E. Oehler, trustee, and signed by Cawley Bros., per Denny Cawley, proprietor, and by us the undersigned. Signed and acknowledged at Tulsa, Oklahoma, this 12th day of May, 1920.

"John J. Cawley

"Patrick B. Cawley.

"Subscribed and sworn to before me this 12th day of May, 1920. Golda Barringer, Notary Public. My Commission expires 3-24-23."

In response to this instrument of writing the creditors of Denny Cawley on the same day executed the following writing:

"May 12th, 1920.

"We, the undersigned, creditors of Cawley Bros., of Ranger, Texas, do hereby agree to extend the time of payment on amounts owing us by said Cawley Bros., of Ranger, Texas, as follows:

"10% June 20, 1920, 10% August 20, 1920, 15% September 25, 1920, 20% October 25, 1920, 20% November 25, 1920 and 25% December 25, 1920, with the understanding that in default of the payment of any installment at maturity then and in that event Denny Cawley shall transfer all of his properties and holdings to V. E. Oehler, as trustee for the benefit of all his creditors to be shared pro rata in proportion to their claims.

"Should it become necessary for Denny Cawley to assign his properties to V. E. Oehler as trustee then the said trustee shall have authority to first realize on said assets before proceeding to collect from John J. Cawley or Pat. B. Cawley."

¶2 On June 27, 1922, the trustee of the creditors brought this action against the defendants, and in his petition he pleaded the above instruments as the contract guaranty, and stated that the credit had been given but the notes had never been executed and delivered, that 70 per cent. of the amount of the creditors claims had been paid, but default had been made in payment of the balance due, being the sum of $ 12,633.79, which is itemized according to the several accounts. It was further stated that Denny Cawley never transferred his properties and holdings or any part of same to the trustee, "as provided in acceptance agreement, after default had been made in the deferred payments as provided in said guaranty agreement." Defendants demurred to the petition on the ground that neither the separate causes of action stated, nor the petition as a whole were sufficient to allege a cause of action against the defendants. The demurrer was sustained and cause dismissed, and plaintiff appealed by petition in error and case-made, urging that it was error to sustain the demurrer, for the reason the action was based upon a guaranty contract in writing, which was sufficient for all purposes under section 5034, Comp. Stat. 1921. Plaintiff claims the instrument signed by defendants was a complete contract within itself upon the acceptance of the creditors, and was a sufficient guaranty and needed no notice of acceptance from the creditors to put it in force, and if such notice was necessary the instrument signed by the creditors was sufficient for this purpose. The defendants contend that the notice was more than sufficient and amounted to a counter proposition in adding after the conditions of payment, the words, "with the understanding that in default of the payment of any installment at maturity then and in that event Denny Cawley shall transfer all of his properties and holdings to V. E. Oehler, as trustee, for the benefit of all his creditors to be...