Shores-Mueller Co. v. Palmer

• Decision Date: 01 December 1919
• Docket Number: (No. 25.)
• Parties: SHORES-MUELLER CO. v. PALMER et al.
• Court: Arkansas Supreme Court

216 S.W. 295

SHORES-MUELLER CO. v. PALMER et al.

(No. 25.)

Supreme Court of Arkansas.

December 1, 1919.

Appeal from Circuit Court, Phillips County; J. M. Jackson, Judge.

Suit by the Shores-Mueller Company against W. J. Palmer, John Palmer, W. B. Jarrett, Walter G. Kindel, and L. E. Kindel, guardian of Walter G. Kindel. Judgment of dismissal as to defendants other than Walter G. Kindel, and plaintiff appeals. Judgment, in so far as it dismisses complaint as to first three named defendants, affirmed, and, in so far as it dismisses complaint against last-named defendants, reversed and remanded.

Shores-Mueller Company, an Iowa corporation, brought this suit against W. J. Palmer, John Palmer, W. B. Jarrett, Walter G. Kindel, and L. E. Kindel, guardian of Walter G. Kindel, to recover the price of certain merchandise. On the 4th day of March, 1913, the Shores-Mueller Company, an Iowa corporation, entered into a written contract with W. G. Kindel of Marvell, Ark., to sell him certain toilet goods, household medicines, veterinary remedies, and other goods manufactured by said company. The company agreed to sell the goods to Kindel at wholesale prices, and the latter agreed to pay his account in monthly installments. The company agreed to furnish him, free of charge, on board the cars at its factory in Iowa, a reasonable amount of advertising matter, report and order blanks, and to give him, free of charge, instructions and advice through letters and bulletins as to the best methods of selling its products to customers. Throughout the contract Kindel is called the salesman. The contract was accepted by the company at its home office in Cedar Rapids, Iowa. W. J. Palmer, John Palmer, and W. B. Jarrett signed the following, which was attached to the contract and became a part of it.

"In consideration of Shores-Mueller Company extending credit to the above-named person, we hereby guarantee to it, jointly and severally, the honest and faithful performance of the said contract by him, waiving notice of acceptance and all notices, including notice of salesman's default, and agree that any extension of time or change of territory shall not release us from liability hereon."

On the 30th day of March, 1916, the probate court of Phillips county, Ark., adjudged Walter G. Kindel to be an insane person and committed him to the state hospital for nervous diseases, where he has since been confined. L. E. Kindel was appointed his guardian and duly qualified as such. On the 12th day of September, 1916, W. J. Palmer, John Palmer, and W. B. Jarrett gave the Shores-Mueller Company notice in writing to require it to commence suit against Walter G. Kindel at once. The said company failed to comply with this notice within 30 days after it was served upon it.

The circuit court dismissed the suit against the defendants W. J. Palmer, John Palmer, and W. B. Jarrett on the ground of plaintiff's failure to comply with sections 7921 and 7922 of Kirby's Digest. The circuit court dismissed the suit against L. E. Kindel, as guardian of Walter G. Kindel, on the ground that the subject-matter of the suit was business transacted in this state by the plaintiff and that it had failed to comply with the laws of the state with regard to foreign corporations doing business here. The case is here on appeal.

R. B. Campbell, of Helena, and Sam Latkin, of Little Rock, for appellant.

Moore & Vineyard, P. R. Andrews, and J. G. Burke, all of Helena, for appellees.

HART, J. (after stating the facts as above).

The court was right in dismissing the suit as to W. J. Palmer, John Palmer, and W. B. Jarrett, and wrong as to dismissing it against L. E. Kindel, as guardian of Walter G. Kindel, an insane person. In the first place, it may be stated that appellant could sue appellees in one action and that the contract signed by W. J. Palmer, John Palmer and W. B. Jarrett was a contract of guaranty. Fluhart v. W. T. Rawleigh Co., 126 Ark. 307, 190 S. W. 118. These parties gave appellant notice in writing to bring suit at once against the principal debtor under sections 7921 and 7922 of Kirby's Digest. The sections read as follows:

"Sec. 7921. Any person bound as surety for another in any bond, bill or note, for the payment of money or the delivery of property, may, at any time after the action hath accrued thereon, by notice in writing, require the person having such right of action forthwith to commence suit against the principal debtor and other party liable.

"Sec. 7922. If such suit be not commenced within thirty days after the service of such notice, and proceeded in with due diligence, in the ordinary course of law, to judgment and execution, such surety shall be exonerated from liability to the person notified."

This brings us to the consideration of the question of whether or not a guarantor under a contract like the present one is a surety within the meaning of the statute. It is true that there is a difference between the contract of a surety and that of a guarantor, in this, that the contract of a surety starts with the agreement, and that the liability of a guarantor is established for the first time with the default of the principal debtor. At the same time, a guaranty contract is generally regarded as a breach of suretyship, and the effect of the reasoning in the case of Hall v. Equitable Surety Co., 126 Ark. 535, 191 S. W. 32, is to hold that a guarantor is a surety within the meaning of sections 7921 and 7922 of Kirby's Digest. In that case the court held that the sureties on a bond in an indemnity contract did not come within the statute, but treated guaranty contracts as coming within the...