Peterson v. Miller Rubber Co. of New York

• Court: U.S. Court of Appeals — Eighth Circuit
• Writing for the Court: STONE, Circuit , and REEVES and OTIS
• Citation: Peterson v. Miller Rubber Co. of New York, 24 F.2d 59 (8th Cir. 1928)
• Decision Date: 25 January 1928
• Docket Number: No. 7690.,7690.
• Parties: PETERSON et al. v. MILLER RUBBER CO. OF NEW YORK.

24 F.2d 59 (1928)

PETERSON et al. v. MILLER RUBBER CO. OF NEW YORK.

No. 7690.

Circuit Court of Appeals, Eighth Circuit.

January 25, 1928.

H. V. Mercer, of Minneapolis, Minn. (E. J. Lien and John G. Priebe, both of Minneapolis, Minn., on the brief), for plaintiffs in error.

Clark R. Fletcher, of Minneapolis, Minn. (E. P. Allen, of Minneapolis, Minn., on the brief), for defendant in error.

Before STONE, Circuit Judge, and REEVES and OTIS, District Judges.

REEVES, District Judge.

Plaintiffs in error seek reversal of a judgment in the sum of $10,000 recovered against them as sureties or guarantors by defendant in error in the trial court. Plaintiffs in error and another were defendants below, and defendant in error was plaintiff, and the parties will be so designated in this opinion.

The style of the action was "Miller Rubber Company of New York, a Corporation, v. F. W. Abbott Company, a Corporation, and E. G. Peterson and F. W. Abbott, defendants." F. W. Abbott Company did not join in the application for writ of error, nor did it sue out such a writ on its own account. The judgment was "that the plaintiff, Miller Rubber Company of New York, a corporation, do have and recover of and from the defendant F. W. Abbott Company, a corporation, the sum of twelve thousand six hundred and twelve and 6/100 dollars ($12,612.06), and from the defendants E. G. Peterson and F. W. Abbott the sum of ten thousand and no/100 dollars ($10,000.00), in all the sum of twelve thousand six hundred and twelve and 6/100 dollars ($12,612.06), together with its costs and disbursements in this behalf expended."

The action proceeded against the individual defendants upon the theory of a suretyship for the corporate defendant. Plaintiff manufactured and sold automobile tires, tubes, and accessories, and F. W. Abbott Company had been employed as a sales agent. The petition alleged the execution of a written contract of employment between the assignor of the plaintiff and F. W. Abbott Company on the 1st day of November, 1918. This agreement was in its nature an agency contract, plaintiff company being the principal. Among other duties devolved upon the corporate defendant as agent, by the contract, was the following:

"It being understood and agreed that the party of the second part shall assume and pay all collection expenses and assume all losses for bad accounts and further said second party shall execute and deliver to said first party a bond to the approval of first party in the sum of ten thousand dollars ($10,000.00), guaranteeing the payment to it of all accounts for goods sold by second party, the liability on said bond to become fixed at the option of the first party as to each account on failure to pay the same within sixty days after maturity and the surety on said bond shall waive all notice of default in payment of any account and shall consent to any extension of time of payment thereof, and said bond shall be further conditional to secure the safe delivery and redelivery to first party of all stock so placed in the hands of second party as hereinafter provided." (Italics are ours.)

On the same date, and pursuant to the requirements of said contract, the corporate defendant, with the individual defendants as sureties, executed and delivered to plaintiff their bond in the penal sum of $10,000. The following pertinent recitals are contained in said bond:

"Whereas, the said F. W. Abbott Company has entered into contract in writing with the Miller Rubber Company, a copy of which said contract is hereto attached and made a part of this instrument, by the terms of which said contract is it provided, among other things, that said the F. W. Abbott Company has assumed the responsibility for and has guaranteed the collection of all accounts for goods sold by it from the stock of the Miller Rubber Company, and payment to said the Miller Rubber Company of the selling price of such sales, and have further agreed to safely keep the said stock of the Miller Rubber Company placed in its care, and redeliver the unsold portion thereof to said company on the termination of said contract, and to protect the same from all loss and damage while in their custody:

"Now, therefore, if the said the F. W. Abbott Company shall well and faithfully account to said the Miller Rubber Company for the selling price of all sales by it made, pursuant to said contract, and shall collect and pay over to it the gross amount of said sales in the manner provided in said contract, and shall safely keep and care for the stock of said the Miller Rubber Company placed in its hands, and return the unsold portion thereof to it at the termination of said contract, free from damage, except such as may arise from deterioration by lapse of time, and shall do and perform all other things required by it under the terms of said contract, then this obligation shall be void; otherwise, the same shall remain in full force and effect. The Miller Rubber Company, however, reserves to itself the option of increasing the stock of casings and tubes above the amount set out in said contract, without notifying or in any way relieving said surety from his obligation under this bond."

"It is agreed by and between the parties hereto that the liability of the surety on this bond shall not become absolute as to any account for goods sold by said the F. W. Abbott Company under said contract, unless said account or any part thereof shall remain unpaid for sixty days after the maturity thereof (the terms of sale to be thirty days net) and said surety consents to an extension or extensions of time of payment, or extensions of credit that may be given by...