McCormick Harvesting Machine Co. v. Reiner , 4 Kan. App. 725 ( 1896 )

The opinion of the court was delivered by

Dennison, J.:

So for as the defendant Prentice is concerned, there is no contention that he in person signed the guaranty. The firm name of Reiner & Prentice was signed by George E. Reiner. The evidence discloses the fact that Reiner & Prentice were in partnership in the hardware and machine business, and there is no evidence that either one had any authority to bind the partnership by indorsing or guaranteeing notes or to go security for third persons.

“It is no part of the business of a partnership to give a guaranty of or become surety for the payment of the debts of others or to bind its credit to third persons. The holder of a note made or indorsed by one partner without the consent of the firm, therefore, who knows that the signature of the firm was given for the purpose of accommodation or as surety, cannot recover as against the partnership, though the partner who thus uses the firm name is himself bound as though he had given his individual signature.” (17 Am. & Eng. Encyc. of Law, 1021.)

It is contended by the plaintiff that Reiner signed the guaranty upon the notes in fulfillment of the written contract between the plaintiff and defendants. A careful examination of the contract fails to support the contention. It is provided that, if sales are made to parties adjudged by the company to have been doubtful or worthless at time of sale, the notes taken for such sale shall be taken by Reiner & Prentice to apply on their commission. It is also provided that, if the company finds that any note passed upon at settlement was doubtful or worthless at the time of sale, then Reiner & Prentice shall take the note and replace it with cash or notes secured by good and responsible parties acceptable to the company. All that the contract stipulates is that Reiner & Prentice shall take the doubtful or worthless notes for their commission, or, after settlement, take the notes and replace them with cash or acceptable notes. There is no contract to guarantee the notes. If Reiner & Prentice or either of them guaranteed the notes they certainly must have done so in pursuance of some contract other than the written contract of agency. It therefore follows that the signature of the firm executed by Reiner upon the notes did not bind Prentice. Prentice denied the execution of the guaranty under oath, and no error was committed by the court in excluding the introduction of the - note as evidence against Prentice until its execution by him had been proved. The demurrer of Prentice to the evidence of the plaintiff as to him was properly sustained.

As to the transaction between Reiner and Rood, the agent of the company, it appears from the testimony that Rood was present for the purpose of making a settlement with Reiner & Prentice on behalf of the company, and that the company ratified his actions in making the settlement. Rood testified that the contract mentioned in connection with the guaranty, and to which the guaranty was subject, was the written contract of agency. Reiner testifies that it was the oral contract mentioned in the answer of Reiner. The finding of the court settles this in Reiner’s favor. The plaintiff contends that this contradicts the terms of the written contract of agency and is contrary to it, and that Rood, being a traveling salesman, and not a general agent, had no authority to make such deviation from the terms of the written contract. As already stated, the written contract did not provide for the guaranty of notes by Reiner & Prentice. It appears that Rood objected to the notes upon the setdement. It was therefore the duty of Reiner & Prendce to take the notes upon their commission. There was no commission coming to them, but Reiner told Rood that he could get the father of Sailsbery to sign the notes, as that was the agreement when the notes were taken, and Rood said that would be satisfactory. Sailsbery’s father lived in the country, and Reiner testified that he, Reiner, signed the guaranty to the notes so that Rood could send in the complete settlement upon the terms stated in the verbal contract, that the company should return the notes' to Reiner at once so that he could obtain the surety, at which time Reiner & Prentice should be released from the guaranty. The contract of guaranty must be construed with the contract with the company to which the notation referred. They were made at the same time, as parts of one and the same transaction. The notation was sufficient to put the company upon inquiry as to what contract was meant. It has no right to presume it meant the written contract of agency, for the' contract of agency did not provide for a personal guaranty. The finding of the jury, approved by the court, settles the fact that the notation refers to the oral contract. The company failed to carry out its part of said contract, and because of its failure the loss accrued. Having failed to perform its part of the contract it cannot recover.

The judgment of the district court is affirmed.

All the Judges concurring.