William Deering & Co. v. Mortell

• Decision Date: 21 December 1906
• Citation: 110 N.W. 86,21 S.D. 159
• Parties: WILLIAM DEERING & CO. v. MORTELL et al.
• Court: South Dakota Supreme Court

110 N.W. 86

21 S.D. 159

WILLIAM DEERING & CO. v. MORTELL et al.

Supreme Court of South Dakota

December 21, 1906

Appeal from Circuit Court, Grant County.

Action by William Deering & Co. against Richard Mortell and others. From a judgment for defendants, plaintiff appeals. Affirmed.

Preston & Hannett and Thad L. Fuller, for appellant.

S. S Lockhart and Thomas L. Bouck, for respondents.

HANEY J.

The allegations of the complaint are in substance as follows That on March 31, 1892, the plaintiff and defendant Mortell entered into an agency contract; that on the same day the defendants Kaercher, Benedict, and Lockhart guarantied in writing the performance of such contract; that such guaranty was accepted by the plaintiff, of which acceptance the guarantors had notice; that on October 11, 1892, an accounting was had according to the terms of the contract whereby it was ascertained that Mortell owed the plaintiff $6,171.89 which he promised to pay; and that he still owes the plaintiff $2,920.49, with interest from March 18, 1898. Defendants Kaercher, Benedict, and Lockhart, in substance deny that they guarantied the agency contract; deny any knowledge or information sufficient to form a belief as to Mortell's failure to perform the same; allege that they merely signed an offer to guaranty for which no consideration passed from the plaintiff; that no agent of the plaintiff was present when such offer was signed and that it was not signed at plaintiff's request; and they specifically deny that they received any consideration for making such offer, or were ever notified of its acceptance by the plaintiff. Defendant Kaercher also pleaded a discharge in bankruptcy. At the conclusion of the testimony the plaintiff moved for a directed verdict against Benedict and Lockhart which was denied, and defendants' motion for a directed verdict was granted. Kaercher's discharge in bankruptcy not being challenged, the only question presented for review is whether the court erred in directing a verdict for Benedict and Lockhart.

The evidence discloses that the following instrument appended to the agency contract was signed by Kaercher, Benedict, and Lockhart at the request of Mortell, without the knowledge of the plaintiff, and sent to the plaintiff by Mortell through the mails, and that the signers did not know of its acceptance until after the indebtedness sued for had been contracted; "In consideration of the appointment or retention of above part as agent of William Deering & Co., for the sale of their harvesters, binders, reapers, mowers, trucks, extras, twine, and other property in certain territory, the undersigned jointly and severally guaranty the fulfillment by said agent of all his obligations and duties growing out of or relating to such agency or otherwise, that now or hereafter may exist, and we agree to pay said William Deering & Co., or their successors, all damages they may sustain by reason of any default of said agent; that the written acknowledgment of or a judgment of any court against said agent, shall in every respect bind and be conclusive against the undersigned, their heirs and representatives; and that the liability hereby created shall not be waived, modified, or canceled by any extension of time to pay or keep any part of said obligations or duties, or otherwise, nor except by surrender to us of this guaranty and agreement, or by indorsement hereon by William Deering & Co., at their home office in Chicago." No consideration was received by the signers, and none, passing to them from the plaintiff, is acknowledged in the instrument. "A mere offer to guaranty is not binding until notice of its acceptance is communicated by the guarantee to the guarantor; but an absolute guaranty is binding upon the guarantor without notice of acceptance." Rev. Civ. Code, § 1974. Appellant concedes there was no notice of acceptance, but insists none was necessary because there was an absolute guaranty. The North Dakota statute is identically the same as ours.

In discussing its application to an instrument substantially the same as the one in this case, and which was obtained under substantially the same circumstances, the Supreme Court of that state points out the distinction between an offer to guaranty and an absolute guaranty in the following clear...