McConnon & Co. v. Prine , 128 Miss. 192 ( 1921 )

Ethridge, J.,

delivered the opinion of the court.

The appellant brought suit against J. L. Prine, W. M. Prine, Jr., and B. P. Slay, for goods sold to J. L. Prine by the appellant on a written guaranty signed by W. M. Prine, Jr., and B. P. Slay. The account was itemized and verified by affidavit, and is made an exhibit to the declaration, as is also the written guaranty signed by W. M. Prine, Jr., and B. P. Slay, which guaranty reads as follows:

“For and in consideration one dollar, to us in hand paid by McConnon & Co., the receipt whereof is hereby acknowledged, we hereby jointly and severally guarantee, absolutely and unconditionally at all times, payment at Winona, Minnesota, of any indebtedness to the said Mc-Connon & Co., hereafter incurred by or for John Leonard Prine of Weathersby, state of Mississippi, by reason of the sale of goods, wares, merchandise and equipment to him, from time to time, by the said McConnon & Co., regardless of his ability or willingness to pay and we hereby waive notice of any default by the said John Leonard Prine and, consent to any extension by McConnon & Co. of time of payment by him.

“This undertaking shall be an open one and shall so continue at all times without respect to residence or location of business of the said John Leonard Prine until revoked in writing by us, the undersigned sureties, notice of revocation to be served on the said McConnon & Co. at its office in Winona, Minnesota.

“It is- understood that there are no conditions or limitations to this undertaking,*except those written or printed herein, at the date hereof, and that after execution no alteration, change or modification hereto shall be binding or effective, unless executed in writing signed by ourselves and McConnon & Company under the corporate seal of said Company.

“In witness whereof, we have hereunto set our hands and seals at Winona, Minnesota, this 9th day of* July, 1919.”

The declaration averred that the goods were sold to J. L. Prine after their receipt of said guaranty, and that said defendants were jointly and severally liable to the plaintiff. The declaration failed to aver that notice of acceptance was given the guarantors before the furnishing of said goods. The declaration ivas demurred to by W. M. Prine, Jr., and B. P. Slay, and the defendant J. L. Prine filed a counter affidavit, denying the item sued on, and denying he was indebted in any manner to the plaintiff. The demurrer of W. M. Prine, Jr., and B. P. Slay was on the following grounds: First, because the declaration sues these defendants as joint promisors with J. L. Prine, when the exhibit thereto shows- they are only guarantors to said contract; second, because the declaration shows on its face th'at the principal debtor had not been sued heretofore and judgment obtained against him, or that he is insolvent and bankrupt, and further shows that no execution was ever run against the principal defendant for any sum that may be due by him to plaintiff; third, becahse the declaration fails to show that plaintiff has been diligent in the collectiSn of its debt, or that the terms and conditions of its contract have beén complied with; fourth, because there is a misjoinder of causes of action; fifth, because there is a misjoinder of parties. The demurrer was overruled and the defendants, W. M. Prine and B. P. Slay, filed two special pleas: First, that the contract of suretyship on which plaintiff sues defendants avers a consideration of one dollar to the defendants paid by the plaintiff, and that in truth and in fact said consideration was never paid to them by. the plaintiff, nor to any other person, and therefore said guaranty is without consideration and void; the second plea alleges that plaintiff should not recover on the guaranty because the guaranty signed by the defendants was for goods to be delivered in future and for an unlimited amount, and plaintiff did not notify defendants within a reasonable time after the same had been received by the plaintiff or said guaranty had been accepted, or that plaintiff intended to ship goods to J. L. Prine on said guaranty; and further that the defendants never received any notice from plaintiff that plaintiff had accepted the guaranty and shipped or sold goods thereon, and received no notice whatever that said guaranty had been accepted until long after the goods were sold and shipped to the defendant J. L. Prine, and long after the account had become due and payable. These two pleas were demurred to, the demurrer overruled, plaintiff de-dined to plead further, and suit was dismissed, from which this appeal is prosecuted.

We think the guaranty constitutes an obligation without condition or limit other than that stated therein, and that the real consideration was the sale and shipping of articles to J. L. Prine, and that the recited consideration of one dollar does not preclude the plaintiff from stowing the real consideration, and that -the plea of the failure to pay the one dollar constitutes no defense. The demurrer to said plea should have been sustained. As to the second plea, we are of the opinion that the contract of guaranty was an absolute and unconditional obligation to pay any indebtedness to the plaintiff that might thereafter be incurred by J. L. Prine, and as 'this contract of guaranty expressly stipulates, “It is understood that there are no conditions or limitations to this undertaking,^except those written or printed herein, at the date hereof,” dispenses with the necessity of giving notice. The guarantors undertook absolutely to pay any amount that the plaintiff might furnish J. L. Prine, and that no acceptance was necessary to be communicated to the guarantors. There was no provision for any such .notice, and in view of the stipulation just mentioned none can be implied or read into the contract; consequently said plea did not constitute a defense. The guarantors had the right to so contract as to bind themselves without such notice, and they have effectually done so.

It is insisted that the demurrer of the plaintiff to the pleas of the defendants ought to be extended back to the declaration on the principle that the demurrer searches the pleadings and will be applied to the first pleading that is demurrable, and that the declaration shows a misjoinder of causes of action and a misjoinder of the parties; and that so extending it will result in affirming the judgment of the court below regardless of the merits of the two pleas above set forth.

A careful reading of the contract of guaranty shows that the obligation of the guarantors and the principal, J. L. Prine, springs simultaneously from the act of the creditor, the plaintiff, in selling or furnishing the goods to J. L. Prine. In the case of Wren v. Pearce, 4 Smedes & M. 91, the principle was discussed which, we think applicable to this case at page 97 of that report where the court said:

“But for another reason, the objection could not be sustained in this case. 'Where the guaranty or promise, though collateral to the principal contract, is made at the same time with the principal contract, and becomes an essential ground of the credit given to the principal debtor, the whole is one original and entire transaction, and the consideration extends and sustains the promise of the principal debtor, and also of the guarantor. No other consideration need be shown, than that for the original agreement upon which the whole debt rested, and that may be shown by parol proof, as not being within the statute’ [citing authorities]. This principle covers the present ease, because in the .declaration the guaranty is averred to have been made at the time of the delivery of the goods, and the promise to guaranty to have been made before.”

As we see the record the obligation of each of the defendants springs out of the same transaction at the same time, and each of the defendants are individually liable to the creditor for the goods. A'payment by either would satisfy the account, or a partial payment by each would reduce it to the extent of the payment. The contract was not to guaranty the solvency of J. L. Prine, but was an obligation on the part of the guarantors to pay the account; consequently the creditor had the right to resort to all or either of them. Ordinarily the contract of guaranty is separate from that of the principal debtor, and where the contracts are separable and made on different considerations a’joint action could not be maintained; but'where all are primarily responsible and where the liability of each springs out of the same act, the fact that the obligation of the different defendants may be evidenced in a different manner would not prevent suit from being maintained against them jointly and severally, nor would it make the causes of action separate and distinct. In 20 Cyc., p. 1484, under the head “Parties” it is said:

“The rule formerly was that a contract of guaranty, being separate and distinct from the principal contract, a joint action could not be maintained against the principal and guarantor of an. obligation. But this rule has been greatly modified by the Codes of various states which now often permit one action to be maintained against both principal and guarantor. Some cases also distinguish between a guaranty executed simultaneously with the principal contract and one made thereafter, based upon a separate consideration. The principal debtor is not a necessary party. Persons who have jointly guaranteed the payment of a note which is payable to themselves may be sued either jointly or severally.”

So we think in the present case the plaintiff had a right to sue all the parties in the same account, and the judgment of the court below will be reversed, and the cause remanded:

Reversed and remanded.