Strange v. Cooper Grocery Co.

• Decision Date: 16 February 1928
• Docket Number: (No. 599.)
• Citation: 4 S.W.2d 232
• Parties: STRANGE et al. v. COOPER GROCERY CO.
• Court: Texas Court of Appeals

4 S.W.2d 232

STRANGE et al. v. COOPER GROCERY CO.

(No. 599.)

Court of Civil Appeals of Texas. Waco.

February 16, 1928.

Rehearing Denied March 22, 1928.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, McLennan County; Giles P. Lester, Judge.

Action by the Cooper Grocery Company against M. D. Dugger and others. From a judgment for the plaintiff against defendants W. L. Dugger and G. R. Strange, they appeal. Reversed and remanded for further proceedings.

John McGlasson and W. L. Eason, both of Waco, for appellants.

Witt, Terrell & Witt and James P. Alexander, all of Waco, for appellee.

GALLAGHER, C. J.

The Cooper Grocery Company, hereinafter styled plaintiff sued M. D. Dugger and M. D. Dugger, Jr., composing the firm of M. D. Dugger & Son, W. L. Dugger, and G. R. Strange, hereinafter styled defendants, to recover on nine promissory notes in the aggregate sum of $36,667.75. All said notes were payable to plaintiff and executed by defendants M. D. Dugger & Son as principals. One of said notes in the sum of $13,667.75 was also signed by defendant W. L. Dugger. Plaintiff alleged that the payment of $10,000 of said note was secured by written guaranty signed by W. L. Dugger and said Strange, and that said guaranty also covered and secured the other eight notes sued on. M. D. Dugger & Son pleaded their discharge in bankruptcy. The pleadings of defendants Strange and W. L. Dugger were sufficient to raise the issues hereinafter considered.

The case was submitted to a jury on special issues. The findings of the jury in response thereto are, in substance, as follows:

(1) W. L. Dugger did not know before he delivered said guaranty contract to J. R. Milam that the same contained the clause, "and any indebtedness created on this day or hereafter."

(2) W. L. Dugger believed when he signed the contract of guaranty that same covered only $10,000 of the purchase price of the assets purchased.

(3) J. R. Milam authorized W. L. Dugger to represent to G. R. Strange that the Cooper Grocery Company would sell the assets of the Dugger Grocery Company to M. D. Dugger & Son if he, the said G. R. Strange, and said W. L. Dugger, would execute a guaranty covering $10,000 of the purchase price of said assets.

(4) W. L. Dugger did represent to G. R. Strange that the Cooper Grocery Company would sell the assets of the Dugger Grocery Company to M. D. Dugger & Son if he, the said G. R. Strange, and W. L. Dugger, would execute a guaranty covering $10,000 of the purchase price of said assets.

(5) G. R. Strange did not know that the contract of guaranty covered any indebtedness except $10,000 of the purchase price of said assets.

(6) G. R. Strange relied upon said representations in signing said contract of guaranty.

The court rendered judgment on the verdict of the jury in favor of plaintiff, Cooper Grocery Company, against defendants G. R. Strange and W. L. Dugger, jointly and severally, for the sum of $10,000 as part of said $13,667.75 note on their written guaranty, and against W. L. Dugger as surety on said note for the remainder due thereon, and that plaintiff take nothing against the firm of M. D. Dugger & Son or the individual members thereof on account of their discharge in bankruptcy.

Opinion.

Plaintiff contends that the court erred in refusing at its request to charge the jury to return a verdict in its favor against the defendants Strange and W. L. Dugger for the amount of the eight notes aggregating $23,000, upon which it was denied a recovery, and that the material findings of the jury on which such recovery was denied are without support in the evidence. There is very little conflict in the testimony with reference to the facts which led up to the execution and delivery of said guaranty. A corporation known as the Dugger Grocery Company, in which all the Duggers had been interested, had become financially embarrassed and had made an assignment. The assignee, in due administration of his trust, sold the entire assets of said corporation, including its stock of goods, wares, and merchandise, its furniture and fixtures, and its notes and accounts, to plaintiff for the sum of $22,000. M. D. Dugger and his son, M. D. Dugger, Jr., desired to purchase all said assets and to continue the business under the firm name of M. D. Dugger & Son. Plaintiff desired to sell all said assets to some one who would continue the business. W. L. Dugger, a son of M. D. Dugger, Sr., and a brother of M. D. Dugger, Jr., conducted the negotiations between the parties. He, however, was not a member of the firm of M. D. Dugger & Son. Plaintiff proposed to sell the entire assets which it had bought from the assignee of the Dugger Grocery Company to M. D. Dugger & Son for the sum of $22,000. No money was to be paid. $10,000 of the purchase price was to be evidenced by a promissory note of the firm and secured by a guaranty signed by M. D. Dugger, W. L. Dugger, and G. R. Strange. According to some of the testimony, said entire purchase price was to be evidenced by promissory notes of the firm and secured by a mortgage on the furniture and fixtures and an assignment of the notes and accounts transferred to the firm as a part of such purchase, and, according to other testimony, only the remaining $12,000 thereof was to be so secured. W. L. Dugger, who is a son-in-law of defendant Strange, suggested that said Strange would aid the Duggers to get back into business. The amount which he would be willing to guarantee was discussed. It was finally agreed that Strange and W. L. Dugger and M. D. Dugger should sign a guaranty for a part of the purchase price and that their liability thereon should be limited to $10,000. There is no contention that anything was said in any conversation leading up to the execution and delivery of the guaranty, or at the time of the execution or delivery thereof, with reference to either of said guarantors being bound for the payment of any indebtedness thereafter created by the firm for future purchases. Plaintiff's witnesses testified affirmatively that nothing of that kind was said. They did testify, however, that instead of saying "a guaranty," Mr. Milam said "one of our guaranties," and Mr. Milam further testified that W. L. Dugger had signed such a guaranty on one or more prior occasions, and that he thought the said Dugger understood that said form of guaranty, while limited as to past indebtedness, included future advances, and that he intended that indebtedness for such advances should be included in the guaranty sued on. On cross-examination this witness testified, in substance that he agreed to sell said assets to M. D. Dugger & Son for $22,000, to be secured by chattel mortgage on the furniture and fixtures, an assignment of the notes and accounts, and the guaranty of $10,000 of the purchase price by W. L. Dugger and G. R. Strange, and that the deal was closed on that basis. W. L. Dugger testified that he did not read the guaranty under consideration and that while he had theretofore signed one or more guaranties to the plaintiff, he did not read them in detail, and that he did not know that they nor the guaranty sued on contained any provision making the signers thereof liable for future purchases. He further testified that when the terms of sale were agreed upon, Mr. Milam took a blank guaranty and said:

"I will fix this for $10,000. You get Mr. Strange to sign it and you sign it."

All the guaranty was printed except the date, the names of the purchasers, M. D. Dugger & Son, and the specific amount named therein. These blanks Mr. Milam filled with a pen, writing "ten thousand dollars" in the appropriate blank as the specific amount of the guaranty. Said guaranty, so far as material to the particular issues here under consideration, reads:

"I, we or either of us hereby guarantee to said the Cooper Grocery Company, its successors and assigns, unconditionally, the payment of any indebtedness of M. D. Dugger & Son now existing in favor of the said the Cooper Grocery Company of Waco, Texas, not exceeding the sum of $10,000.00, and any indebtedness created on this day or hereafter until notice in writing by registered mail." (Italics ours.)

The construction of the language used by the parties at the time and the weight to be given to the testimony of the respective witnesses were matters for determination by the jury, and we cannot say that the first and second findings of the jury with reference to the understanding of W. L. Dugger in signing the guaranty sued on are without support in the evidence.

Plaintiff, in the negotiations with reference to the sale of said assets and the execution and delivery of said guaranty, had no direct dealings with the defendant Strange. After the guaranty was signed by W. L. Dugger it was delivered to him to procure the signature of Strange thereto, in the forenoon. Mr. Strange was then in the country. About 7 o'clock that evening Mr. Milam called W. L. Dugger by phone and asked if Strange had returned and if he had signed said instrument. On being informed that Mr. Strange was in town but had not signed the same, Mr. Milam said to Dugger:

"It is very important that we get it fixed up to-night; suppose you run over and get Mr. Strange to sign it and bring it to the store and we will fix up the papers. You come by my house and get me."

He further stated in that connection that he understood some one was figuring on filing a petition in bankruptcy, and he wanted the sale to go over before a petition in bankruptcy was filed. Dugger went immediately to Mr. Strange's home and found him at the supper table. He presented the instrument to Mr. Strange and pointed out the "ten thousand dollars" written therein and said: "Here is the guaranty for ten thousand dollars." Dugger testified that he was in a hurry and hurried Mr. Strange a little with reference to his signing the instrument, and while he did nothing to prevent Mr. Strange from reading the same, he did tell him, "You...