New Idea Spreader Co. v. Satterfield , 45 Idaho 753 ( 1928 )

This action was brought against respondents, as guarantors, to recover a balance due on an account with the Intermountain Farmers' Equity, of which respondents were directors. The contract of guaranty, procured from respondents by the Intermountain Farmers' Equity at appellant's request, provides that the undersigned ". . . . guarantee and hold myself personally responsible for the payment . . . . of all . . . . goods, wares and merchandise so sold and delivered, whether evidenced by open account or note. . . . ." At the close of appellant's evidence, the trial court sustained respondent's motion for nonsuit.

It is contended that the trial court erred in granting the motion because there was "no competent proof" of appellant's corporate capacity. The guaranty, alleged in haec verba in the complaint, states that respondents gave the guaranty to the "New Idea Spreader Company, a corporation of Coldwater, Ohio. . . . ." Having dealt with appellant as a corporation, respondents cannot deny its corporate capacity. (Toledo etc.Co. v. Young, 16 Idaho 187, 101 P. 257.)

Appellant likewise contends that the trial court erred in granting the motion because there was no competent proof that the transaction was interstate in character. There was competent evidence that the guaranty was executed by respondents at Pocatello, in this state, and was forwarded to and received by appellant at Coldwater, in the state of Ohio. It was, therefore, an interstate transaction. (Bertilyon HomeBuilders Co. v. Philbrick, 31 Idaho 724, 175 P. 958; PacificStates Automotive Finance Corp. v. Addison, 45 Idaho 270,261 P. 683.)

The third, fourth, fifth and sixth grounds of the motion, based on the alleged failure of appellant to establish the liability of the Intermountain Farmers' Equity for the items set forth in a bill of particulars, demanded by and served on respondents previous to the trial, are likewise untenable. They were not seriously urged on the trial and have received little, if any, consideration by the parties on this appeal. The motion for nonsuit should have been denied if appellant satisfied the burden of proof as to any one item. Applying this test, the court erred in sustaining the motion on these grounds.

The seventh and principal ground on which nonsuit was granted was that there was no evidence that the "alleged guaranty was ever accepted." There appears to be an irreconcilable conflict in the authorities as to the necessity of notice to the guarantors of acceptance by the guarantee. The conflict would seem to have arisen because of the difficulty in distinguishing between an absolute guaranty and an offer of guaranty. It is generally held that a mere offer of guaranty must be accepted and notice thereof given to bind the one who makes the offer. (28 C. J. 901.) On the other hand, ". . . . where the transaction is not merely an offer of guaranty, but amounts to a direct or unconditional promise of guaranty . . . . all that is necessary to make the promise binding is that the promisee should act upon it and notice of acceptance is not necessary. . . . ." (28 C. J. 904.)

The instrument does not purport to be an offer of guaranty; on the contrary, it recites an absolute and unconditional promise of payment at maturity of the purchase price of all goods, wares and merchandise sold and delivered by appellant to Intermountain Farmers' Equity, and sets forth that ". . . . this is intended to be a continuing guaranty, applying to all sales made by you to Intermountain Farmers' Equity, from this date until the same is revoked by me in writing." From the language used by them it is plain that the makers intended by the instrument to guarantee the payment of all goods sold by appellant to Intermountain Farmers' Equity from that date until it was revoked by them.

That the guaranty was continuing rather than a promise to pay a then existing debt does not affect the obligation of the signers. (McConnon Co. v. Prine, 128 Miss. 192, 90 So. 730.) Furthermore, the guaranty shows that notice of acceptance was neither necessary nor expected. In fact, notice of acceptance alone would not have bound the guarantors. They, by the terms of the instrument, definitely conditioned their liability, not on the acceptance of any offer of guaranty, but on the sale of goods to Intermountain Farmers' Equity. (Crittendon v. Fiske,46 Mich. 70, 41 Am. Rep. 146, 8 N.W. 714; Sheffield v.Whitfield, 6 Ga. App. 762, 65 S.E. 807; McGowan v. Wells, Trustee, 184 Ky. 772,213 S.W. 573.) Appellant having made sales of goods to Intermountain Farmers' Equity, respondents became bound on their promise of payment for such goods without having been notified of the acceptance of the guaranty. (Midland Nat. Bankv. Security Elev. Co., 161 Minn. 30, 200 N.W. 851; Watkins Med.Co. v. Brand, 143 Ky. 468, 136 S.W. 867, 33 L.R.A., N.S., 960; Globe Printing Co. v. Bickley, 73 Mo. App. 499; Mott IronWorks v. Clark, 87 S.C. 199, 69 S.E. 227; White SewingMachine Co. v. Powell, 25 Ky. Law Rep. 94, 74 S.W. 746; Marchv. Putney, 56 N.H. 34; Bank of California v. Union etc. Co.,60 Wash. 456, 111 P. 573.)

The eighth ground of nonsuit was that appellant had proved the signatures on the guaranty of only two of the respondents. The motion was in behalf of all the respondents. In the absence of a specific motion by those respondents only whose signatures were not proven, the motion should have been denied.

The ninth ground was that the evidence shows that appellant had not exhausted its recourse against the Intermountain Farmers' Equity. A sufficient answer to this contention is that the guarantors, by the terms of the guaranty, waived "the requirement of legal proceedings against the Intermountain Farmers' Equity."

The court erred in sustaining the motion and in entering the judgment appealed from. The judgment is reversed. Costs to appellant.

Givens, Taylor and T. Bailey Lee, JJ., concur.

Budge, J., concurs in the conclusion reached.