McConnon & Co. v. Stallings

McConnon Company, plaintiff below, entered into a contract with one Denny, by which it was agreed that it would, from time to time, as ordered, sell him certain goods, wares and merchandise. Payment therefor was to be made from the proceeds of the sale of such goods and, on the expiration of the contract, a cash settlement was to be made for any outstanding balance. On the back of the contract, for a recited consideration, Stallings and another —

" . . . . do hereby jointly and severally and unconditionally promise and guarantee the full and complete payment of said medicines, extracts, and other articles at the time and place and in the manner as in said agreement provided.

"J.A. CARVER.

"M.E. STALLINGS."

The action is against both the principal and guarantors for a balance due on the contract. Defendant Stallings answered, and by cross-complaint set up a claim for damages, equal to plaintiff's demand, incurred by reason of the failure to notify him, within a reasonable time, of Denny's default in making payment. The trial court sustained a motion for a nonsuit on the cross-complaint and directed a verdict for plaintiff. Defendant Stallings appeals from the judgment.

Appellant's contention is that, since the action was based on a continuing guaranty, the guarantee was required to give the guarantors reasonable notice of the default of the principal. Admitting that the contract with appellant is of a continuing nature, respondent upholds the action of the trial court on the ground that, since the guaranty is absolute and unconditional, it was not necessary to give notice of the principal's default in order to hold the guarantors.

As a general rule a guaranty of the payment of the obligation of another is an absolute undertaking imposing liability upon the guarantor immediately upon the default of the principal regardless of whether notice is given to the guarantor. (28 C. J. 972, 980; Farmer's State Bank v. Hansen, 174 Wis. 100,182 N.W. 944; Cumberland Glass Mfg. Co. v. Wheaton, 208 Mass. 425,94 N.E. 803; Booth v. Irving Nat. Exchange Bank, 116 Md. 668,82 A. 652; Rawleigh Co. v. Deavours, 209 Ala. 127,95 So. 459; Murphy v. Hart, 122 A.D. 548, 107 N.Y. Supp. 452.) And while there are authorities supporting appellant's contention (see note, 105 Am. St. 518), this question would appear to have been settled in this state, for this court held, in Rawleigh. Med. Co. v. Atwater, 33 Idaho 399, 195 P. 545, that a substantially similar guaranty was absolute and a right of action accrued against the guarantor immediately upon breach of the contract by the principal.

This is an absolute guaranty. The guarantors "jointly, severally and unconditionally promise and guarantee full and complete payment . . . . " of the obligation of the principal, as in the agreement provided. There is no condition, express or implied, for giving notice to the guarantors of the default of the principal. The right of action accrued, as this court said in the case last above cited, on the breach of the contract by the principal, and no notice of the default of the principal is necessary to a recovery from the guarantors.

The judgment is affirmed. Costs to respondent.

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