Reid, Murdock & Co. v. Bradley

• Decision Date: 09 April 1898
• Citation: 74 N.W. 896,105 Iowa 220
• Court: Iowa Supreme Court
• Parties: REID, MURDOCK & CO. v. BRADLEY et al.

105 Iowa 220

74 N.W. 896

REID, MURDOCK & CO.

v.BRADLEY et al.

Supreme Court of Iowa.

April 9, 1898.

Appeal from district court, Lyon county; Scott M. Ladd, Judge.

Action by Reid, Murdock & Co. against Charles W. Bradley and another upon a contract of guaranty. Defendant Bradley admitted the execution of an instrument of guaranty to the plaintiff, but claims a mistake therein in so far as it related to any pre-existing indebtedness of the principal, and further says that the contract was obtained through fraud and misrepresentation as to its contents. He prayed for a reformation of the instrument and a dismissal of the petition. The case was transferred to the equity side of the calendar, and tried to the court, resulting in a judgment for plaintiff. Defendant Bradley appeals. Affirmed.E. C. Roach and McMillan & Dunlap, for appellant.

DEEMER. C. J.

On and prior to August 23, 1893, the Hastings-Bradley Company, a corporation, was indebted to appellee for goods and merchandise sold and delivered in the sum of $493. On that day appellant, Bradley, entered into a written contract of guaranty with appellee, the material parts of which are as follows: “For value received, and in consideration of the forbearance in collection and extensions of time upon the [purchase of merchandise or advances of money heretofore made to, or] purchases or advances of money which may hereafter be made by or advanced to Hastings & Bradley Company, of Rock Rapids, Iowa, and for other good and valuable consideration, I hereby guaranty the payment of any indebtedness owing to Reid, Murdock & Company by the said Hastings & Bradley Company, of Rock Rapids, Iowa, to the amount of all purchases, together with interest on all the above-described indebtedness at the rate of eight per cent. per annum. And I hereby further guaranty prompt payment at maturity of any notes which may be given in settlement of such purchases or advances, with interest at eight per cent., waiving my right to any notice of extensions of time, or the fact that such notes may be given; also waiving notice of the acceptance of the within guaranty, meaning and intending hereby, for and by the consideration above mentioned, to unqualifiedly guaranty any and all indebtedness which may now or hereafter exist, or be owing to Reid, Murdock & Company by the Hasting & Bradley Company, of Rock Rapids, Iowa.” Before signing the contract Bradley struck out the words inclosed in brackets, and his contention is that in so doing he intended to absolve himself from liability for all pre-existing indebtedness; that it was the understanding and agreement that the guaranty should relate to future transactions, and that, in so far as it appears to cover past or present indebtedness of the corporation, it is of no validity, because entered into through mistake, and by reason of the fraud of appellee. A careful reading of the evidence satisfies us that Bradley did not intend to guaranty the past indebtedness of the corporation. The facts appear to be that prior to August, 1893, Bradley was a stockholder in the corporation. During that year it became involved, and was unable to promptly meet its indebtedness. On the 18th day of August, Hastings, who had theretofore been president of the corporation, retired, and Bradley was elected in his place. Bradley also became the general manager of the concern. Shortly after this change was made, appellee's credit man appeared upon the scene for the purpose of securing or collecting the indebtedness then owing by the corporation. By reason of his selection as manager, Bradley was interested in securing a line of credit for his corporation. Such was the attitude of the parties when they met. The credit man insisted upon a guaranty covering past indebtedness. This Bradley absolutely refused to give, and to this conclusion was guided by the...