Wood v. Canfield Paper Co.

• Decision Date: 02 May 1928
• Docket Number: (No. 1052-4559.)
• Parties: WOOD v. CANFIELD PAPER CO.
• Court: Texas Supreme Court

5 S.W.2d 748

WOOD v. CANFIELD PAPER CO.

(No. 1052-4559.)

Commission of Appeals of Texas, Section A.

May 2, 1928.

Certified Questions from Court of Civil Appeals of Second Supreme Judicial District.

Action by the Canfield Paper Company against Owen A. Wood. Judgment for plaintiff, and defendant appealed to the Court of Civil Appeals, which certified the question to the Commission of Appeals. Certified question answered in favor of defendant.

John J. Hiner, of Fort Worth, for appellant.

Austin F. Anderson and McGown, McGown & Anderson, all of Fort Worth, for appellee.

Statement of the Case.

NICKELS, J.

The certificate of the Court of Civil Appeals, Second district, reads as follows:

"The Canfield Paper Company, a corporation, instituted this suit to collect a debt in the sum of $2,852.67 for goods sold by the plaintiff to the Popular Finance Publishing Corporation. The suit was not instituted against the corporation last named who purchased the goods, but was against Owen A. Wood, and the demand against him was based solely upon the following letter signed by the defendant and accepted by the plaintiff, and by reason of which the goods were sold and delivered. The letter was copied in the petition and reads as follows:

                                        "`March 12, 1924
                

"`Canfield Paper Company, 62-64 Duane street, New York City. Attention Mr. F. W. Osgood, Manager — Dear Sir: Thank you for your favor of yesterday in which I am pleased to note that your firm will be glad to accept orders from the Popular Finance Publishing Corporation, providing I give you my written guarantee that payment will be made within 60 days from date of invoice. It being the understanding that, we will wish to limit the amount to cover 2 months issues, which at present amount to about $6,000.

"`This arrangement will be entirely satisfactory to us and meets with our approval. I accordingly wish to advise you that I will personally guarantee the payment of your bills for paper ordered by the Popular Finance Publishing Corporation to the extent of $6,000.

"`You will accept this letter as such written guaranty.

                   "`Very truly yours
                             "`[Signed] Owen A. Wood.'
                

"It was alleged that `the Popular Finance Publishing Corporation has wholly failed and refused to pay the same or any part thereof; that by reason of the failure and refusal of the said Popular Finance Publishing Corporation to pay said sum aforesaid and the guarantee aforesaid, the defendant, Owen A. Wood, thereby became liable and bound to pay this plaintiff the said sum in said account specified, yet though often requested defendant has not paid the same or any part thereof.'

"No reason or excuse was alleged in the petition for not suing the Popular Finance Publishing Corporation, the principal debtor, nor was there any allegation that a judgment had already been recovered against it for the debt.

"In answer to the petition the defendant filed a general demurrer and a general denial. His general demurrer was overruled and he excepted to that ruling.

"The case was then tried, and upon evidence heard judgment was rendered in plaintiff's favor for the amount of the debt claimed in the petition. From that judgment the defendant has prosecuted this appeal.

"The only assignment of error presented in this court by appellant is that the court erred in overruling his general demurrer to the plaintiff's petition. In support of that assignment he relies upon the provisions of the following four articles of the statutes and the absence of any showing of reason for not suing the principal, such as are mentioned in article 1843, Rev. Statutes:

"`Art. 6336: No surety shall be sued, unless his principal is joined with him, or unless a judgment has previously been rendered against his principal, except in the cases provided for in article 1843.'

"`Art. 6337: The remedy provided for sureties by this title extends to indorsers, guarantors, drawers of bills which have been accepted, and every other suretyship, whether created by express contract, or by the operation of law.'"

"`Art. 1842: The acceptor of any bill of exchange, or any other principal obligor in any contract, may be sued either alone or jointly with any other party who may be liable thereon; but no judgment shall be rendered against such other party not primarily liable on such bill or other contract, unless judgment shall have been previously, or shall be at the same time, rendered against such acceptor or other principal obligor, except where the plaintiff may discontinue his suit against such principal obligor as hereinafter provided.'

"`Art. 1843: The assignor, indorser, guarantor and surety upon any contract, and the drawer of any bill which has been accepted, may be sued without the necessity of previously, or at the same time, suing the maker, acceptor or other principal obligor, when he resides beyond the limits of the state, or in such part of the same that he cannot be reached by the ordinary process of law, or when his residence is unknown, and cannot be ascertained by the use of reasonable diligence, or when he is dead, or actually or notoriously insolvent.'

"The following authorities cited by appellant seem to support the contention that the demurrer should have been sustained: Mullaly v. Ivory (Tex. Civ. App.) 30 S. W. 259; Elliott v. Wiggins, 16 Tex. 597; Fisher v. Phelps, 21 Tex. 555; Kampmann v. Williams, 70 Tex. 571, 8 S. W. 310; Elliott v. Bank, 105 Tex. 547, 152 S. W. 808; Moore v. Belt (Tex. Civ. App.) 206 S. W. 225.

"Appellee insists that the demurrer to the petition was properly overruled since the appellant's guaranty was absolute and unconditional. In other words, it is insisted that only conditional guarantors, as distinguished from absolute guarantors, were embraced within the meaning of the articles of the statutes above quoted.

"The following are the principal authorities relied on by appellee in support of its contention: Smith v. Cummer Mfg. Co. (Tex. Civ App.) 223 S. W. 338, and other authorities there cited; El Paso Bank & Trust Co. v. First State Bank (Tex. Civ. App.) 202 S. W. 522; Slaughter v. Morton (Tex. Civ. App.) 185 S. W. 905; Tilt-Kenney Shoe Co. v. Haggarty, 43 Tex. Civ. App. 335, 114 S. W. 386; McCarroll v. Red Diamond Clothing Co., 105 Ark. 443. 151 S. W. 1012, 43 L. R. A. (N. S.) 475.

"While the decisions last cited seem to support appellee's contention, yet we are inclined to a contrary conclusion, in view of the fact that the statutes are plain and unambiguous, applying to guarantors generally without any distinction between absolute and conditional guarantors. In other words, since the statutes seem to us plainly to refer to all contracts of guaranty alike without any distinction between absolute and conditional guaranties, we are inclined to the opinion that the courts are not warranted in reading into them, as it were, the distinction made by the decisions cited by appellee. We believe those decisions are in principle, to say the least, in substantial conflict with most of those cited by appellant.

"In view of what we have said and of the importance of an authoritative determination of the question, we deem it advisable to certify to your honorable court the following question:

"Did the trial court err in overruling appellant's demurrer to appellee's petition?"

Opinion.

A guaranty, according to Judge Story is "an undertaking by one person to be answerable for the payment of some debt or the performance of some contract or duty by another person, who himself remains liable." That definition consists with the ancient as well as the modern concept, and with the popular as with the technical idea. Vide, Webster; 2 Daniel on Negotiable Instruments (5th Ed.) § 1752; Clymer v. Terry, 50 Tex. Civ. App. 300, 109 S. W. 1129, 1131.

The statutes mentioned in the certificate were enacted in 1858, and in substantially the original form they have been re-enacted in all of the revisions. That lawmakers used the word "guarantors" with knowledge of the meaning imported by Judge Story's definition is not to be doubted; a question here is a challenge of their knowledge of the unchanging popular and technical meaning of an ordinary and much used word. The statutes include the term and omit qualification touching those who may claim their benefits. The law is so written; and as written it must be given effect unless, indeed, a reason appears of imperative force to wrench the word from its obvious meaning and to disclose an intent apparently negated.

Magic is not a quality of nomenclature, and the fact that a person may call himself a "guarantor" does not inevitably make him one. Davis v. Patrick, 141 U. S. 479, 12 S. Ct. 58, 35 L. Ed. 826. His obligation gives character, and if by that he be a "guarantor" there is in the court no warrant for withholding from him what the lawmakers said he should have. That Wood's obligation lies within the generally accepted definition of "guaranty" is too plain to admit of argument. That no contrary meaning was intended by the parties or is to be found lurking amongst the words used is affirmed in the pleading. It is there said: (a) Wood represented that Popular Finance Publishing Corporation desired to purchase and "would make payments"; (b) Canfield Paper Company took the matter under consideration and then advised Wood that orders from Popular Finance Publishing Corporation would be accepted provided he "would give * * * a written guaranty"; (c) Wood gave said "guaranty" and thereupon Canfield Paper Company "sold and delivered to the said Popular Finance Publishing Corporation * * * certain goods" and thereby "said Popular Finance Publishing Corporation did then and there promise to pay to plaintiff * * * so much money as said goods * * * were reasonably worth, $2,052.67"; (d) "said Popular Finance Publishing Corporation has not paid said sums of money," and "by reason of the failure and refusal of the said Popular Finance...