Phœnix Brewing Co. v. Rumbarger , 181 Pa. 251 ( 1897 )

Opinion by

Mr. Justice Fell,

The facts established by the evidence furnish no ground for the application of the theories on which the defense was based, even if it were conceded as argued by the appellants that the taking of a note payable at a future day for an existing debt implies prima facie an agreement to wait until the note matures, and discharges the parties secondarily liable for the payment of the debt as sureties or guarantors, a proposition by no means in accord with our cases : See Shaw v. The Church, 39 Pa. 226; Hutchinson v. Woodwell, 107 Pa. 510; Buck v. Wilson, 113 Pa. 423. The right of the principal to postpone the fulfilment of the contract is at variance with that of the surety to demand its punctual performance or to perform it himself and sue for indemnity; and generally any act of the creditor which prevents the surety from insisting on the fulfilment of the contract as originally made or which entitles the principal debtor to delay is a ground of defense in an action against the surety. But in order to exonerate the surety it must appear that the original obligation was changed by a binding agreement, and the new contract must be such as would be a valid defense by the principal debtor to an action on the original agreement: Notes to Rees v. Berrington, 2 Leading Cases in Equity, 1906; U. S. v. Howell, 2 Am. Leading Cases, 472.

The bond on which the action was founded was not for the payment of any amount at a fixed time. It was of the nature of a bond of indemnity, and the condition was that Rumbarger, the principal in the bond, should pay all accounts for beer and liquors purchased by him of the plaintiff in pursuance of a contract made and a course of dealing established, “ when and as often as the same may fall due, or when thereunto legally required.” Nothing was due when the bond was given. It had reference to future dealings only, and its delivery was a condition precedent to the opening of the account. No contract as to the time within which payments were to be made was after-wards entered into, and none can be implied from the course of dealing between the parties. Beer was purchased every few days, and payments on account appear to have been made from time to time and without any fixed rule. The balance due steadily increased, and at the end of fourteen months it amounted to $1,700. Without an agreement between the parties as to'the amount due on the open account, Rumbarger, without any request and wholly of his own motion, sent two judgment notes, one at three and one at six months, to the plaintiff, for the balance that appeared from his books to be due. The receipt of these notes was not acknowledged by the plaintiff, they were not credited on its books, and at the end of three months payment of the whole account was demanded; but at the request of Rumbarger the plaintiff waited until the maturity of the second note, when judgment was entered on it and execution issued.

As the bond was given to cover the amount of sales which might be made for an indefinite period in a continuing business, it must be presumed in the absence of any stipulation on the subject that it was contemplated by all the parties that there would be an allowance of the usual credits. But it is unnecessary to resort to presumptions, as by the terms of the bond there could be no default except by the failure of the principal to pay when due according to an express or implied agreement between him and the plaintiff. The allowance of credits usual under the custom of the business would not have varied the contract, and in the absence of all testimony on the subject the court could not assume that the allowance of three or six months was unusual or unreasonable. The notes were not given or accepted for a balance ascertained after all business arrangements between the parties had ended, which was then due and demanda ble. It is true that there were no sales after the dates of the notes, but when they were sent it was the expectation of the plaintiff, based on the representations of Rumbarger, that the business would continue. It cannot therefore be said that there was a satisfaction or merger of the original debt, or a giving of time to the principal debtor which varied the contract and exonerated the sureties.

The objection that there was no affirmative proof by the plaintiff that it had complied with the second section of the Act of April 14,1868, P. L. 389, requiring the branding of barrels and casks in which liquors are sold and the giving of a certificate to the purchaser is. without force. The act does not prohibit the prosecution of the business when its provisions are not complied with, but provides a separate penalty for a failure to observe them. The burden of proof, if any defense could have been based on the act, was with the defendants: Horan v. Weiler, 41 Pa. 470.

The judgment is affirmed.