Quapaw Pumping Royalty Co. v. Camblin

This is a suit on an account, which is set out in the record, and also the plaintiffs in error's brief. This is made an exhibit to the plaintiffs' petition, and shows a balance of $3,146.19. The original contract upon which this action is based was made the 18th day of July, 1919, between plaintiffs and defendant Quapaw Pumping Royalty Company. This contract is set out in detail, as will appear by the statement of the opinion. The Quapaw Pumping Royalty Company was operating what is known as the Brinson-Kirtley mine, and the contract is made in relation to that mine. They were having trouble with the motor which furnished the power for dewatering the mine, and Mr. Camblin, representing the Empire Engineering Service Company of Joplin, Mo., went to the mine and made an examination on or about May 15, 1920, and told them that he could repair the motor and have it in good running order inside of 48 hours, as he had the necessary repairs in his shop at Joplin, but he required as a condition precedent to working on the motor that the Quapaw Pumping Royalty Company guarantee the open account from and after May 15, 1920. There had a considerable balance accumulated on the account prior to that date, but he only required the open account to be guaranteed from May 15 by the guaranty contract, which 'was drawn by Mr. Camblin of the Empire Engineering Service Company and signed by him for that company, and signed by C.H. Cleveland, D.C. DeVilliers, and W.I. Bingham, who were officers and stockholders in the Quapaw Pumping Royalty Company, a corporation, as guarantors. This guaranty contract is set out in the foregoing statement, and it will be observed that this guaranty contract only guarantees the open account of any indebtedness contracted by the Quapaw Pumping Royalty Company with the Empire Engineering Service Company from May 15, 1920, and does not relate to or guarantee any part of the account that was contracted prior to that date. The plaintiffs did not repair the motor and have it in working order within the time that they agreed, to wit, 48 hours. It seems that when they examined the supplies they had on hand, they did not have the coils necessary to repair this motor and had to make them or procure them from the factory, and it was two or three weeks before they repaired the motor, and then it did not work well, and after trying it for sometime they took it out and installed another motor, and that did not work well, and Mr. Camblin, representing the Empire Engineering Service Company, went over the situation and said they would have to put in a new motor of a different make, and asked Mr. Spafford, the superintendent of the Quapaw Pumping Royalty Company, to give him an order to put in a new motor, or repair the one in the mine. Mr. Spafford said he did not have any authority to give orders, that they would have to get the order from the company. Camblin then asked Spafford if he would not make a suggestion to the company that they install a new motor, and after some talk Spafford agreed to do so, and wrote the following suggestion: "Would suggest that the Quapaw Pumping Royalty Company put motor in as good condition as it was when last installed in the Kirtley shaft. G.O. Spafford." Camblin acted on this suggestion of Spafford and treated it as an order, notwithstanding the fact that Spafford had told him that he could not give an order, that he would have to get that from the company, and incurred an indebtedness of $772.57 in an effort to repair the motor already in the mine instead of putting in a new one, and this item constitutes a part of the account sued on, and is contested on the ground that it was incurred without authority from the Quapaw Pumping Royalty Company, and that they would not have incurred that expense if they had known it was being incurred. They seemed to have taken it as a part of the work that Camblin was to do to put the motor in good running order. Another item which is contested is the rental on the motor of $1,088.84. The guarantors contend that they did not guarantee the rental account as that was contracted under the original contract of July, 1919, and they contest the payment of this item. Another item which is contested is for $145 rental on a line panel. The Quapaw Pumping Royalty Company contend that they never agreed to pay any line panel rent, and nothing was ever said to them about, any such rent, and for the first two or three months, there was no charge made for it, and it appears to have been put in there because Camblin took offense to some remark that was made by Mr. Chambers, who, as Camblin said, tried to get smart, and he just thought he would tax them with rent on the line panels; and the Quapaw Pumping Royalty Company contest the payment of this item. Another item which is contested by the guarantors is the amount of said account which accrued prior to May 15, 1920, and amounts to $978.03. In our judgment, while the Quapaw Pumping Royalty Company is liable for this amount, the guarantors are not liable for any part of it, because they only guaranteed the open account from and after May 15, 1920. These four items are the principal items that are contested, and on the decision of these four items, the case will largely turn. There is one instruction requested by the defendant guarantors which was requested by them and refused by the court, which instruction reads as follow's:

"The court instructs the jury that if you shall find and believe from the evidence in this cause that on or about May 18th, 1920, defendants, C.H. Cleveland, W.I. Bingham and D.C. DeVilliers, executed the guaranty contract introduced in evidence and that the consideration for the execution of said contract was the agreement and promise of plaintiff to render to defendant Quapaw Pumping Royalty Company efficient engineering service and have the motor in the Brinson-Kirtley mine in working order within forty-eight hours from said May 18th, 1920, and if you shall further find and believe from the evidence that said plaintiff did not comply with said agreement and did not have said motor in operating order within said forty-eight hours from said date, then said defendants, C.H. Cleveland, W.L. Bingham and D.C. DeVilliers, are not liable to plaintiff on said contract of guaranty and your verdict will be for said defendants."

The defendants also saved exceptions to instructions No. 6 and No. 9 given by the court, which are as follows:

"You are instructed that the plaintiff seeks to recover a judgment against C.H. Cleveland, D.C. DeVilliers and W.I. Bingham, as guarantors, of all indebtedness created in their favor by the defendant Quapaw Pumping Royalty Company after May 15th, 1920, and that said individual defendants contend there is a failure of consideration for their contract of guaranty by reason of which they are released therefrom; and if you find and believe from the evidence in this case that the plaintiff guaranteed to the defendants that if said individuals would guarantee the payment of the indebtedness incurred by it subsequent to May 15th, 1920, and that they would furnish engineering service and have the defective motor in the Brinson-Kirtley mine in operation within 48 hours after such guaranty was furnished, and that the said guarantors relied upon such agreement and would not have incurred liability upon such contract of guaranty but for the making of such guaranty by the plaintiff, then the guarantors would be released from liability on said contract unless you find and believe from the evidence in the case that the plaintiff substantially complied with the terms of such agreement. Provided, that if you should find and believe from the evidence in this case that the plaintiff in making such agreement, if you find such agreement was made, relied upon the statements or representations of an agent or employe of the defendant Quapaw Pumping Royalty Company as to the condition of the defective motor at the time of making of such agreement, and that such guarantors were advised of such fact, and you further believe that the condition of said motor at said time was not fairly and truthfully represented to the plaintiff, then the guarantors would not be released from liability upon the failure of the plaintiff to substantially perform the terms of the agreement with reference to the repair of such motor."

"You are instructed that under the evidence in this case there is no issue for your consideration as to the matter set up by the defendants concerning the right of the plaintiff to maintain this suit, nor to the question of damages by reason of the defendant being required to operate its pumps for two months longer than it says would have been required if a proper motor had been furnished by the plaintiff, and that as to the guarantors there is but the one question for you to consider and that is the question submitted under instruction No. 6."

We will now take up the four items, above set out, before passing on the instructions. We will first take up the part of the action that accrued prior to May 15. We do not think there is any question about the defendant guarantors not being liable for this account under the contract which was written by Mr. Camblin, representing the plaintiffs, for it does not mention rent but only refers to the open account after May 15, and Mr. Camblin's letter transmitting the guaranty contract to his company reads as follows: "We are enclosing herewith contract of guaranty covering all open accounts of the Quapaw Pumping Royalty Company, dating after May 15, this year." This letter reflects what Mr. Camblin understood the guaranty contract covered. The obligation of the guarantors cannot be greater than that of the principal. Section 5136, Comp. Stat. 1921; Dunlap v. Stannard, 19 Okla. 232, 91 P. 845.

"The guarantor has a right to prescribe the exact terms upon which he will enter into the obligation and to insist upon his discharge if those terms are not observed. It is not a question whether he is harmed by a deviation to which he has not assented. He may plant himself on the technical obligation." 12 Rawle C. L., page 1081.

The guarantors' contract applies only to the open account. Open account is defined in volume 6, page 4985, of Words and Phrases, as follows:

"An open account is one in respect to which nothing has occurred to bind either party by its statements, or an account which is yet fully open to be disputed. Abb. Law Dic. The word 'open' indicates that there is something undetermined by the contract of the parties or by the application of settled rules of law, and an amount cannot be said to be open when no term of the contract remains to be settled by agreement of the parties. McCamant v. Betsell, 59 Tex. 363-368."

In the case of Lamm v. Colcord, 22 Okla. 493-496,98 P. 355, it is said:

"But when the meaning of the language in a contract of guaranty is ascertained and the actual operation under such construction has begun, the guarantor is entitled to the application of the strict rule of construction and cannot be held beyond the precise terms of such contract."

This case has been followed in Shuttee v. Coalgate Grain Company, 70 Okla. 6, 172 P. 780, 781; Eager et al. v. Seeds et al., 21 Okla. 524, 96 P. 646; Britain Dry Goods Company v. Yearout, 59 Kan. 684, 54 P. 1062; Burton v. Dewey, 4 Kan. App. 589, 46 P. 325; U.S. v. Hough, 103 U.S. 71, 26 (L. Ed.) 305; Dolese Brothers Company v. Chaney Rickart,44 Okla. 745-749, 145 P. 1119. Under this contract of guaranty, and the constructions placed on it by Mr. Camblin, who wrote it, we hold that the guarantors, C.H. Cleveland, D.C. DeVilliers, and W.I. Bingham, are not liable for the rental accruing after May 15.

The item of $145 rental on line panels under the same rule and authorities cited on the first proposition applies, and under the testimony that shows this item was put in there long after the guaranty contract was signed, we hold that it is an improper charge against both the Quapaw Pumping Royalty Company and the guarantors.

The item of $772.57, we do not think should be allowed against either of the defendants, as there was absolutely no authority for incurring this item. The only pretended authority that plaintiff claims was in the suggestion of Mr. Spafford. Spafford refused to give an order, telling Camblin that he had no authority to order the motor removed or repaired, and Camblin then asked Spafford if he would make a suggestion that it ought to be done, and Spafford said "Yes", and wrote these words: "Would suggest that the Quapaw Pumping Royalty Company put motor in as good condition as it was when last installed in Kirtley shaft. Signed Spafford." It could not be contended that that authorized Camblin to incur these items of expenses. Spafford had told him that he would have to get the order from the company, but he did not try to procure an order from the company, but acted on this simple suggestion of Spafford's, and went on and incurred this balance of over $700, without any authority to expend that amount of money. He had no right to incur this bill, without direct authority from the Quapaw Pumping Royalty Company, and having no authority, neither the Quapaw Pumping Royalty Company or the guarantors are liable for this item. This leaves the item of $978.03, which is made up of the items contained in the action contracted prior to May 15. Of course the Quapaw Pumping Royalty Company is liable for this, but under no theory of the case could the guarantors be held for this amount. The guarantors, as has been shown, have a right to stand on the strict construction of their guaranty, and as before shown this does not come within the terms of their guaranty, and as to the guarantors this item should have been disallowed. This brings us to the instructions. We will first take up the instruction requested by the plaintiffs. This instruction was drawn and offered on the theory that the contract sued on was an entire contract, and that the plaintiff having failed to fully perform according to its terms could not recover. This instruction would have been proper if the defendants had refused to go further when the plaintiffs failed to comply with it, but they permitted the plaintiffs to delay the matter, and when he did finally get the motor installed and it did not work satisfactorily, they permitted him to try to repair it, and finally permitted him to take it out and put in another one. This he would have no right to do after the expiration of 48 hours, without the consent of the defendants, and for these reasons we think the instruction requested was erroneous. As to the instructions six and nine, heretofore copied in this opinion, we are of the opinion that both of these instructions are erroneous and not sufficiently supported by the evidence. They put too great a burden on the defendants, and especially on the guarantors. Under our view of the case, there were no representations made to the plaintiffs as to what was necessary to repair the motor, either by the Quapaw Pumping Royalty Company, or by the guarantors. The evidence shows that Spafford did not know what was the matter with it, and so stated. None of the others made any suggestion about it at all, because Camblin was an engineer and was supposed to know what was the matter with it, and how it could be repaired. He was so confident that he knew that he agreed to have it in running order within 48 hours. We do not think the suggestion of Spafford that there was something the matter with the coils amounted to anything when Camblin was an engineer, and to say that it was his duty to examine the motor, and see what was the matter with it, and he presumedly did this. If he was mistaken about what the trouble was with the motor and what it would cost to repair it, or the time it would take, it was his mistake, and he should have suffered the consequences; and instruction No 6 is erroneous for instructing the jury that if said individual defendants made statements or representations as to what was wrong with said defective motor, and the plaintiff relied upon them, and that said guarantors were advised of such fact, and that said statements were not fairly and truthfully represented to the plaintiff, then the guarantors would not be released from liability upon failure of the plaintiff to substantially perform the terms of the agreement, with reference to the repair of said motor. In our judgment there is utter lack of testimony to show that any such representations were made, and the instruction on a proposition that is not in the case was error. The ninth instruction is also erroneous because it states as to the guarantors there is but one question for you to consider, and that is the question submitted under instruction No. 6. Having held that instruction No. 6 was erroneous, we necessarily have to hold that No. 9 was erroneous. Enough has been said to show that under our views of the case the judgment of the trial court will have to be reversed and the case remanded for a new trial. However, if the plaintiff will remit the $1,088.84 rental on the pump, and the item of $145 rental on line panels, and the $978.03, the part of the account that had accrued prior to the 15th day of May, from the judgment of $2,614.80 against the guarantors, C.H. Cleveland, D.C. DeVilliers and W.I. Bingham, and remit the items of $772.57, work done for which there was no authority, from the judgment of $3,084.84, against the Quapaw Pumping Royalty Company, within 15 days after the mandate is filed in the court below, making the judgment against the Quapaw Pumping Royalty Company $2,312.27, and against the guarantors, C.H. Cleveland, D.C. DeVilliers and W.I. Bingham, $402.93. Upon the filing of such remittiturs the judgment will be affirmed. Otherwise, the judgment of the trial court will be reversed, and the cause remanded, with instructions to grant a new trial, and it is so ordered.

By the Court: It is so ordered.