Abbott v. National Bank of Commerce of Tulsa

PHELPS, J. This action was commenced in the district court of Tulsa county on August 23, 1932 by the National Bank of Commerce of Tu’sa, Okla., as plaintiff against Charles T. Abbott and E. W. Jacob to recover the principal sum of $3,343 35 with interest and attorney’s fee. The action against Jacob was based upon a promissory note executed by him. The liability of Abbott was asserted to exist by reason of an alleged contract of guaranty executed by him. The cause was submitted to a trial court without the intervention of a jury, and plaintiff prevai’ed against each of the defendants. The court, however refused to allow judgment for attorney's fee against the defendant Abbott on the guaranty. The defendant Abbott presents the case to the court for review on appeal, appearing herein as plaintiff in error. In this opinion we will refer to the parties in the order of their appearance before the trial court. The principal question involved is whether notice of acceptance of the alleged contract of guaranty was necessary in order to hold the defendant Abbott as guarantor. The question is presented under the following state of facts: In October of 1930 the defendant Jacob,' who was then one of the vice presidents of the Exchange National Bank of Tulsa and drawing a salary of $1100 a month, was indebted to the plaintiff bank in the sum of $4,600, which indebtedness was evidenced by a promissory note bearing date of September 3, 1930 and due November 3, 1930'. This note was secured by collateral which was then worth approximately the face of the note. The plaintiff bank decided to require further security. In the transaction which followed, the bank was represented by Mr. T. P. Farmer, vice president, and Mr. J. H. Mc-Birney president. 'On October 28, 1930, Mr. Farmer communicated with Mr. Jacob and requested a guarantor of the indebtedness due the plaintiff bank. According to the testimony of Farmer, the defendant Abbott was discussed as a possible guarantor, and the bank, through Mr. Farmer then offered in substance to extend the note if Abbott would guarantee the payment of the Jacob debt. This testimony was disputed by Jacob, who stated that the name of Abbott as possible guarantor was not mentioned and that the request of Farmer was that he (Jacob) procure a satisfactory and acceptable guarantor to sign the instrument which Farmer then prepared for and presented to Jacob. Later in the day Jacob saw Abbott and requested that he sign the instrument previously prepared by Mr. Farmer. Abbott affixed his signature and returned the instrument to Jacob. The instrument thus executed was as fol’ows: “National Bank of Commerce, “Tulsa, Oklahoma, October 28, 1930. “The National Bank of Commerce “Tulsa, Oklahoma “Gentlemen: In consideration of a renewal and extension of a certain note you hold in the sum of $4,600 dated September 3, 1930 and due November 2, 1930, signed by E. W. Jacobs as payor, and for other good and valuable considerations I do hereby guarantee the payment of said note or any extensions or renewals thereof, or note or notes taken ,in lieu thereof, and agree to pay said note, or renewal note or note taken in lieu thereof, within 30 days after demand is made upon me by you. “It is agreed and understood that this guaranty covers only said sum of $4,600 and in *630 terest and renewals or extensions of time of pajunent thereof and does not include any other or future advances made or to be made by you. (Sgd) Ohas. T. Abbott.” Jacob then delivered the instrument to the plaintiff bank, which granted him an extension of the time of payment until January, 1931, or approximately two months. In December, 1931, or the spring of 1932 the plaintiff bank communicated with Abbott advising him that they were looking to him for payment of the debt. The collateral security given to secure the note was sold in 1932 ; the bank realized approximately $600 from the sale. This sum was credited on the debt, and, together with other credits, reduced the amount to the sum for which this action was brought. The defendant Abbott insists that he should be relieved from liability by reason of the failure of the bank to notify him of. the fact that the instrument of guaranty previously set out had been accepted by it. The merit of this contention depends upon whether the instrument is properly classified ns a mere “offer of guaranty”.or “absolute guaranty.” If it was the former, notice of acceptance was essential; if the latter, such notice was unnecessary. Our statute, section 9605, O. S. 1931, provides : “A mere offer to guaranty is not binding, until notice of its acceptance is communicated by the guarantee to the guarantor; but an absolute guaranty is binding upon the guarantor without notice of acceptance.” Also section 9610, O. S. 1931, provides that: “A guaranty is to be deemed unconditional, unless its terms import some condition precedent to the liability of the guarantor.” A careful reading of the guaranty in the instant case fails to reveal any condition precedent whatever, and under the rule laid down in Masters v. Boyes, 41 Okla. 526, 145 P. 363 and Swift & Co. v. Colvert, 127 Okla. 80, 259 P. 844, we can reach no other conclusion than that the instrument in question was an unconditional guaranty, and a default in payment rendered the guarantor liable. In Oklahoma City National Bank v. Ezzard, 58 Okla. 251, 159 P. 267, we said: “Where a guaranty is made in response to an offer by the guarantee, its delivery to the guarantee completes the contract, and notice of its acceptance by the guarantee and of an intention to act thereunder is not necessary” —and in Miller v. Oil Well Supply Co., 79 Okla. 135 191 P. 1094, in the second paragraph of the syllabus we said the same thing. The two cases last above cited seem to cover the instant case exactly. It is suggested in the brief of the plaintiff in error that there was no consideration for the guaranty and that there was a lack of diligence on the part of plaintiff in presenting its claim against Mr. Jacob. Under the rule laid down by this court in Stuart v. Edwards, 84 Okla. 207, 202 P. 1032, the trial court committed no error in taking the opposite view. The judgment of the trial court is therefore affirmed. McNEILL C. J., OSBORN, V. C. J., and CORN and GIBSON, JJ., concur.