Western Electric Co. v. Dorman , 47 S.D. 195 ( 1924 )

GATES, J.

Appeal by plaintiff from a judgment and from an order denying new trial. The judgment was entered November 16, 1921. The appeal was not taken until June 25, 1923. The appeal, in so far as it is from’ the judgment, must be dismissed. Rev. Code 1919, § 3147; Keyes v. Baskerville, 41 S. D. 214, 170 N. W. 143.

The motion for new trial was denied October 3, 1922, and the appeal was taken June 25, 1923. Section 3147, Rev. Code 1919, provides:

“An appeal to the Supreme -Court must be taken within sixty days after written notice of the filing of the order shall háve been given to the party appealing. *. * * ”

It appears that no written notice of the filing of the order appealed from was ever given to appellant. Its appeal was therefore taken in time, and the motion to dirniss that part of the appeal taken from the order denying new trial must be denied. It is of no consequence that the order was prepared by appellant’s attorneys and by them presented to the trial judge for signature and by them filed. That amounted to knowledge of the order, but knowledge of the order does not start the running of the 6o-day period within which the appeal must be taken. Cowie v. Harker, 32 S. D. 516, 143 N. W. 895; First Nat. Bank v. McCarthy, 13 S. D. 356, 83 N. W. 423.

This brings us to the merits of that portion of the appeal which is now before us. Keyes v. Baskerville, 42 S. D. 381, 175, N. W. 874.

One C. L. Fry was engaged in an electrical business at Do-land under the trade-name of C. D. Fry & Co. He had had some business dealings with appellant on a C. O. D. basis. Desiring to acquire credit with appellant, he and the respondent, Dorman, executed at D'oland a written guaranty hereinafter set forth, and delivered the same to appellant at Minneapolis, Minn. The trial court made the following findings of fact and conclusions of law:

“I. That plaintiff is a corporation, organized under the laws of the state of Minnesota, but that it has never complied with the laws of the state of South Dakota so as to permit it to do business within this state.

“II. That on or about the 21st day of February, 1919, a contract or agreement was made, in words and figures as follows:

“ ‘Western Electric Company, Incorporated. In consideration of one dollar paid to the undersigned-(hereinafter called the guarantor) by Western Electric Company, Incorporated, a corporation (hereinafter called the seller) and the extension by the seller of credit on account from time to time to C. E. Fry & Co. of D'oland, S. D. (hereinafter called the purchaser), which the guarantor hereby requests, the guarantor hereby guarantees the payment when due of all present and future balances on account and all notes or other security given b}r the purchaser for or on account of such ¡balance, but the guarantor’s liability shall not exceed $1,500 at any one time, nothwithstanding the fact that the indebtedness of the purchaser to the seller may exceed that amount.

“ ‘The guarantor hereby waives notice of non-performance on the purchaser’s part notice of acceptance of this guaranty by the seller and any and all defenses that the guarantor might have by reason of any extension of time to the purchaser or the acceptance by the seller of other security, or the releasing of other security, surety, or guarantor. .

“ ‘It is agreed that this guaranty shall continue in force' until written notice of revocation is delivered to the seller by registered mail and until all amounts owing by the purchaser to the seller at the time of delivery of such notice, for which the guarantor is liable hereunder, have been paid in full, and that any payments made by the purchaser, whether before or after notice of revocation of this guaranty, may be first applied by the seller to indebtedness not secured hereby, if such there be. If the guarantor or the purchaser herein is a partnership, it is agreed that any change in the membership thereof shall not affect this guaranty until notice of revocation is given as hereinabove provided. If there be more than one guarantor to this instrument, it is agreed that the liability of the guarantors shall be joint and several.

“ ‘Dated at Doland, S. D., this 21st day of February, 1919.

“ ‘C. L. Fry. [-Seal.]

“‘H. B. Dorman.’

“III. That no consideration was ever paid to or received by the defendant, Dorman, for the signing of said guaranty.

“IV. That C. L. Fry & jCo. is and -was at all' times a fictitious partnership, in that all business transacted under the name of .‘C. L. Fry & Co.’ was done wholly by one C. B. Fry> and that no other person or persons were interested in or had anything to do with said fictitious designation of C. B. Fry & 'Co., and that the said C. B. Fry never complied with the law of this state relative to the filing with the clerk of courts of a statement showing the true name of the person operating under the fictitious trade name of C. B. Fry & Co.

“V. That plaintiff had knowledge of the fact that C. B. Fry was doing business under the fictitious partnership name of C. B. Fry & Co., and that, notwithstanding such knowledge, it shipped goods on credit to C. B. Fry; but that the defendant H. B. Dorman was not advised and did not know that C. B. Fry was the sole party in interest under the fictitious partnership or trade-name of C. L. Fry & Co. until at or about the commencement of this suit, and that he signed the above and foregoing contract of guaranty with the understanding and belief that C. L. Fry & Co. was a bona'fide copartnership and consisted of an association of persons doing business under said partnership name.

“VI. That the contract of indemnity above set forth was wholly made, executed, and delivered within the state of South Dakota.

“VII. That after plaintiff had furnished goods to C. L. Fry and after an indebtedness of approximately $2,500 had been thus incurred by C. L. Fry, plaintiff herein made a settlement with the said C. L. Fry, by reducing said open account of indebtedness to' the form of notes, and accepted the notes of C. L. Fry in payment and satisfaction of said open account, and that, after said notes became due, plaintiff herein 'sued the said C. D. Fry thereon and recovered judgment for the full amount of said promissory notes and interest.

“And from the above .and foregoing findings of fact, the court makes and files the following herein as its Conclusions of Law:

“I. That the plaintiff is not authorized to maintain this suit.

“II. That the agreement of guaranty signed by defendant herein did not authorize or justify plaintiff to sell goods to' C. L. Fry and hold this defendant liable therefor.

“III. That the plaintiff in dealing with 'C. L. Fry as an individual abandoned and disregarded the contract of indemnity with C. L. Fry & 'Co., and thereby released defendant from any obligations thereunder.

“IV. That the plaintiff in accepting the notes of ’C. L. Fry in payment for goods shipped to him on open account, disregarded and abandoned the contract of indemnity of this defendant as to C. L. Fry & Co.

“V. That defendant is entitled to a dismissal of this action, and judgment for his costs herein.”

The latter part of finding I is irrelevant. The securing of the guaranty in question was not the transaction of business in South Dakota within the meaning of our foreign corporation law. Sections 8900-8916, Rev. Code 1919. But even if it was, the evidence shows without dispute that the guaranty was delivered at Minneapolis, and therefore finding VI is not supported toy the _ evidence. See Schiller Piano Co. v. Hyde, 43 S. D. 581, 588, 181 N. W. 196. Even if the transactions between appellant and C. L. Fry & Co. violated our foreign corporation law, out attention has not been called to any principle of law1 that would release Dorman from his liability upon the guaranty.

Finding IV is irrelevant. • This is not an action brought by a person or partnership doing business under a fictitious name. See section 1336, Rev. Code 1919.

Finding V is in part irrelevant and in part not supported by the evidence. C. L. Fry was a sole trader doing busi-. ness as C. D. Fry & Go. The mere lack of knowledge of such' fact cannot release Dorman fromi his liability on the guaranty. The evidence does not justify the finding that Dorman signed the guaranty with the understanding and belief that C. L. Fry & Co. was a bona fide partnership, etc. Upon cross-examination Dorman testified as follows:

“Q. Now1 you say you thought C. L. Fry & Co. was composed of other parties than >C. L. Fry? A. Than 'C. L. Fry.

“Q. Who did you think composed it? A. I did not know.

“Q. Did you ever ask C. E. Fry? A. I supposed he was all right.

“Q. No; answer my question. Did you ever ask C. L. Fry? A. No; I never asked C. E. Fry.

“Q. Did you ever ask anybody? A;. Nobody.

“Q. You knew that'C. E. Fry was running a small electrical business there in the town of Doland? A. Yes, sir.

“Q. You knew the business he was running? A. Yes, sir. *f» ^{s •

“Q. You never saw anybody doing any sort of business connected with the business of >C. L. Fry? A. No.

“Q. He handled all the money so far as you know ?. A. Yes, sir.

“Q. And did1 all the business? A. Did all the business.

“Q. You never inquired of anybody whether there was anybody else interested in the business or not? AL No, sir.”

Conclusion I is entirely unauthorized :by any provision of our foreign corporation law. Even if the shipment of merchandise by appellant to Fry had any bearing upon the matters before us, yet it appears without dispute that all of such transactions were transactions in interstate commerce. Sioux Remedy Co. v. Cope, 235 U. S. 197, 3.5 Sup. Ct. 57, 59 L. ed. 193.

Conclusions II and III are contrary to. the’ facts and obviously contrary to law.

Conclusion IV and finding VII, upon which it was based, are unwarranted because contrary to the terms of the guaranty. The guaranty expressly covered promissory notes.

The order denying new; trial is vacated, and the cause remanded to the trial court, with directions to grant a new trial.

Note. — Reported in 197 N. W. 227. See, Headnote, American Key-Numbered Digest, (1) Appeal and error, Key-No. 356, 3 C. J. Sec. 1074; (2) Appeal and Error, Key-No. 48(1), 3 C. J. Sec. 1061; (3) Appeal and Error, Key-No. 348(1), 3 C. J. 1061; (4) Corporations, Key-No. 642(2), 14A O. J. Sec. 3984; (5) Guaranty, Key-No. 5, 28 C. J. Sec. 37; (6) Partnership, Key-No. 64, 30 Cyc. 420; (7) Guaranty, Key-No. 30, 28 C. J. Sec. 104; (8) Commerce, Key-No. 46, Corporations, 14A C. J. 3992; (9) Guaranty, Key-No. 30, 28 C. J Sec. 104; (10) Guaranty, Key-No. 30, 28 C. J. Sec. 104; (11) Guaranty, Key-No. 5 9, 28 C. J. Sec. 16<8.