Furst & Thomas v. Sandlin

Appellants brought this suit against the appellees as guarantors for the performance of a certain written contract entered into between the appellants and one L. T. Sandlin. There was verdict and judgment for the defendants, from which the appeal is prosecuted.

The first insistence by counsel for appellants is that the contract here in question was made in Illinois, and governed by the laws of that state.

It appears without dispute that said contract signed by the principal, L. T. Sandlin, and also by these defendants as guarantors, was forwarded by mail from this state to the plaintiffs at Freeport, Ill., accompanied by a letter from Mr. Furst, who it appears was engaged in selling plaintiffs' goods under a similar contract. There had been no previous correspondence with reference thereto, and upon the arrival of this contract at Freeport it was there accepted and acted upon by the plaintiffs.

It is recognized as a general rule of law that the validity of a contract is to be determined by the law of the state in which it is made. Deavors v. Southern Express Co., 200 Ala. 372,76 So. 288; Am. Mortg. Co. v. Sewell, 92 Ala. 163,9 So. 143, 13 L.R.A. 299; Southern Ex. Co. v. Gibbs,155 Ala. 303, 46 So. 465, 18 L.R.A. (N.S.) 874, 130 Am. St. Rep. 24; Walker v. Forbes, 25 Ala. 139, 60 Am. Dec. 498; 9 Cyc. 666, 667.

Mutual assent of the parties was, of course, essential to the validity of the contract, and under the undisputed proof in the case the contract forwarded to the plaintiffs was but a proposal until its acceptance by them. It is further stated as a general rule that the contract is entered into in the place where the acceptance is made. 9 Cyc. 670. With the exceptions to the general rules herein stated we are not here concerned.

The following authorities are directly in point as applied to the facts in this particular case, and fully sustain the contention that the contract here in question is an Illinois contract, and to be governed by the laws of that state: Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241; Rawleigh Med. Co. v. Walker, 16 Ala. App. 232, 77 So. 70; Rawleigh v. Van Duyn, 32 Idaho, 767, 188 P. 945.

The principal defense relied upon by the defendants in this cause rested upon the alleged fraudulent representations made by the principal, L. T. Sandlin, to these defendants as guarantors as to the nature of the contract, thereby inducing them to sign the same; but it is not pretended that the plaintiffs (the obligees to the guaranty contract) knew of or participated in the fraud of the principal.

The plaintiffs offered numerous decisions of the Supreme Court of Illinois to the effect that, under these circumstances, the fraud of the principal constituted no defense to the guarantors, among them Davis Sewing Mach. Co. v. Buckles, 89 Ill. 244; Stoner v. Milliken, 85 Ill. 218; McCrea v. Murphy, 90 Ill. App. 434; but to these decisions the defendants' objections were sustained. The authorities offered by the plaintiffs were directly in point upon the defenses interposed, and therefore should have been received in evidence.

For the error indicated, the judgment of the lower court will be reversed, and the cause remanded.

Reversed and remanded.

ANDERSON, C. J., and SAYRE and MILLER, JJ., concur.