Holmes v. Schwab & Sons

Beck, J. Schwab & Sons brought complaint against Holmes to recover the value of certain goods alleged to have been sold to one Shaffer on the guaranty of Holmes. Three letters of credit were written by the defendant to the plaintiffs; one limiting the responsibility of the writer to $3,000, the second limiting his responsibility for goods shipped to $1,500, and a third to $500, making a total of $5,000 for which the defendant issued letters of credit. The letters were dated May 5, 1911, July 29, 1911, and August [45] 12, 1911. Except ás to the amount of credit fixed, and the date after which, on failure,of Shaffer to pay for the goods, responsibility of the writer would become fixed, the letters contained substantially the same stipulations, to wit: an agreement upon the part of the writer that if by the named date Shaffer should fail to pay for the goods that should be ordered by him, then the writer of the letter would pay for the goods at-the price charged, with interest and attorney’s fees. The letters contained also a waiver of notice of shipment. The defendant demurred on the grounds: (1) that the contract between the plaintiffs and the defendant, as appeared from the petition 'and the exhibits attached (the letters referred to), was one of suretyship and not of guaranty; (2) that the plaintiffs could not recover attorney’s fees; (3) that the petition shows that the extent of the original liability of Holmes was the sum of $5,000, and that Shaffer has paid the plaintiff upon the original indebtedness the sum of $562.98, which amount should be deducted from said sum of $5,000. The court overruled the demurrer, and the jury found for the plaintiffs. 1. Whatever of difficulty there may be in specific instances in deciding whether a contract is one of suretyship or guaranty — a difficulty which to a certain extent arises from a confusion produced by the divergent views of the different courts in regard to contracts that have come before them for construction, — there can be no such difficulty in the present case. The contract of Holmes is clearly one of guaranty. There is not a line in it that is of the essence of the contract that is inconsistent with the plaintiffs’ contention that the defendant is liable as a guarantor. 2-5. Previous adjudications of similar questions render it unnecessary to discuss those questions which are ruled upon in head-notes two, three, four, and five. Judgment affirmed. All the Justices concur.