William Filene's Sons Co. v. Lothrop

Pierce, J. This is an action of contract brought in the Municipal Court of the City of Boston upon a written contract of guaranty, signed by the defendant, dated January 20, 1920, and addressed to the plaintiff, which reads as follows: “Please sell to Mrs. Frances E. Stearns on your usual credit terms, such goods, wares and merchandise as she from time to time may select, and in consideration thereof I hereby guarantee and hold myself personally responsible for the payment at maturity of the purchase price of all such goods, wares and merchandise so sold and delivered, whether evidenced by open account or note. I hereby waive notice of acceptance thereof, amount of sales, dates of shipment or delivery, and notice of default in payment. I further waive the requirement of legal proceedings against the said purchaser; this guarantee is limited to seventy-five dollars ($75). This is intended to be a continuing guarantee applying to all sales made by you to Mrs. Frances E. Stearns from this date until the same is revoked by me in writing, up to $75 no payment to be made before March 15th, 1920. Witness my hand and seal this twentieth day of January, 1920.” The answer of the defendant was a general denial, payment and denial of signature. The Municipal Court found for the plaintiff and made a report of its findings [216] and rulings to the Appellate Division of that court. The Appellate Division ordered the “Report dismissed,” and the case is here on appeal from the final order of the Appellate Division. The report discloses that at the trial the defendant admitted that the contract of guaranty was duly executed and delivered as of the date therein set forth. It further appears that Mrs. Stearns, after the delivery of the executed contract of guaranty, opened an account at the store of the plaintiff and continued to make purchases, with payments on account from time to time, until August 1, 1921, at which time there was an unpaid balance of $197.48. It also appears that Mrs. Stearns on August 11, 1920, presented a check of $300, drawn by the defendant and payable to the order of said Frances E. Stearns, to a clerk of the plaintiff, at the store, and asked that it be cashed; that the clerk presented the check “to an official of the house, who said that the check might be cashed if the said Stearns, out of the proceeds of said check, would make a payment on account of the money she then owed the plaintiff;” that the check was then cashed and Mrs. Stearns made a payment of $75 on account of her indebtedness. Notwithstanding the express provision of the contract that “This is intended to be a continuing guarantee applying to all sales made by you to Mrs. Frances E. Stearns from this date [January 20, 1920J until the same is revoked by me in writing,” the defendant contends that the contract of guaranty should be construed as limiting the obligation of the guarantor to a single transaction between Mrs. Stearns and the plaintiff, because of the provision that “this guarantee is limited to seventy-five dollars ($75) ... up to $75, no payment to be made before March 15th, 1920;” or, if not so limited by the terms of the contract, that the provision for a “contiñuing guarantee” was eliminated and the obligation was reduced to a contract of guaranty for a single purchase, before any goods were sold Mrs. Stearns in reliance upon the executed contract, perforce of a letter of the defendant to the plaintiff, dated January 23, 1920, which read so far as it related to the contract as follows: “As far as my guar-antee is concerned I hope you notice that it is only for $75.00, and is not to be payable until March 15th. I hope Mrs. Stearns will be able to pay for any goods she has obtained from you on this guarantee before that date.” It is plain that the parts of the agree [217] ment upon which the defendant relies are not inconsistent with the express agreement that “This is intended to be a continuing guarantee applying to all sales . . . until the same is revoked ... in writing.” It is equally plain that the clause quoted in the letter of the defendant was written for the purpose of enforcing attention to the express limitation of the contract as to the amount of the defendant’s liability and the time when any debt arising under the contract should become payable; and that there is nothing in the circumstances or in the form of the letter, which was written within a day or'two of the execution of the contract, to support the claim of the defendant that the letter was intended to revoke or modify in writing the guaranty. The defendant further contends that the obligation under the contract was extinguished by the payment of $75 of money which came from the defendant and was applied to the account of Mrs. Stearns by the plaintiff. A discharge of the obligation of the defendant would have resulted as claimed by the defendant, if the defendant had given Mrs. Stearns the money which the plaintiff applied to the account with a direction that it should be paid to the plaintiff to be applied on her account, and the plaintiff had knowledge of such a direction when the money was received. In the case at bar there is no evidence that the defendant gave the check to Mrs. Stearns with any direction as to her use of it, and there is no evidence that the plaintiff had knowledge that tho defendant intended that Mrs. Stearns should act as his agent in cashing the check or in making the payment which she made upon the guaranteed account. In these circumstances the continuing obligation of the defendant to the plaintiff was not discharged by the payment of Mrs. Stearns on her account of an amount of money, received by her from the defendant, which equalled the amount of the defendant’s obligation. Reed v. Boardman, 20 Pick. 441, 446. Bayer v. Lugar, 106 App. Div. (N. Y.) 522; affirmed in 186 N. Y. 569. Burke v. Taylor, 46 U. C. (Q. B.) 371. The requests for rulings were refused rightly. Order dismissing report affirmed.