John A. Tolman Co. v. Means

Ellison, J. This action is based on a contract of guaranty, which contract arose under the following circumstances: .One Slade was employed as a traveling salesman for plaintiffs who were a wholesale firm doing business in the city of Chicago. His employment being evidenced by the following writing, viz.: “This memorandum certifies: Engaged James N. Slade as salesman to solicit orders for goods for us (John A. Tolman Company), he expending his entire time and energy in faithfully and intelligently rendering such service for one year from date (or at our option as to time). We are to pay him forty per cent, of the profits he makes on the route selling goods for us, he to pay his own expenses and to furnish his own sample case. We to be the final judge of all credit given customers, aud no order is to be counted as a sale except order acceptable to us. On the further, condition that he stays the full year’s time out, and also stands fifty per cent, of any loss that may be incurred from bad debts, or any expense for collecting difficult accounts on the territory for the time when the sales for the year are collected; we are then to pay an additional ten per cent, of the profits, and until that time this ten per cent, of the profits is to be held as a guaranty fund for the purposes specified. And at the end of the [387] year, when collections for the sales are made, if losses from bad debts have occurred, we are to deduct one half of the amount of the same from this ten per cent, guaranty fund and to pay over the balance, but, if half the amount of the losses exceed the amount of the guaranty fund, we are to standthe balance.” It was understood between plaintiffs and Slade that he was to obtain parties to guarantee the performance of his contract, though no particular persons were mentioned. Slade went to Unionville in the state of Missouri, and, several days after executing the foregoing contract of employment, procured the defendants to sign the following instrument which he mailed to plaintiffs at Chicago, viz'.: “In consideration of the sum of $1 to me in hand paid by John A. Tolman Company, the receipt of which is hereby acknowledged, I or either of us hereby guarantee the payment to John A. Tolman Company, of any and all moneys collected by James N. Slade for account of John A. Tolman Company, and for all moneys which they may from time to time advance to said James N. Slade, and any and all indebtedness now due or which may hereafter become due John A. Tolman Company in excess of the amount due James N. Slade as per agreement between said John A. Tolman Company and said James N. Slade, and to accept a verified statement of the accounts as kept in the regular books of said John. A. Tolman ■Company as correct and final between the said company and the said James N. Slade, and without requiring any demand or notice of default. My liability, however, is limited hereby to one thousand dollars ($1,000) ■together with interest at eight per cent, per annum until paid, and all costs, attorneys’ fees and expenses that shall arise from enforcing collections, and for such .amounts this is intended as a continuing guarantee.” [388] Plaintiff obtained judgment below. The contention here is that there should have been notice given to defendants of the acceptance of their contract of guaranty. And in support of this contention we are cited to the cases of Childs v. Rankin, 9 Mo. 673, and Savings Bank v. Shine, 48 Mo. 456, to which we add Taylor v. Shouse, 73 Mo. 361. Plaintiffs, on the other hand, contend that defendants’ contract is one where they agree to be directly liable, and that it is not a mere overture or proposition to guarantee a contingent liability of another party, and, hence, no notice of acceptance is necessary, citing Barker v. Scudder, 56 Mo. 272, and Machine Co. v. Jones, 61 Mo. 409. There is perhaps no question where more diverse and contradictory opinions have been pronounced. The legal’ propositions formulated and stated are substantially uniform, but the application of the facts in the different cases to these principles is confusing in the extreme. It will be noted that the principal contract here was entered into in Chicago, Illinois; and that the obligations, duties and debts of Slade were mainly contingent on future action; and that the guaranty by these defendants was executed in Missouri several days after-wards and forwarded to plaintiffs at Chicago. The original contract and the guaranty were not contemporaneous. Nothing appears in this part of the transaction to show that plaintiffs accepted of defendants as guarantors. They may have rejected them because of their distance and inconvenience from Chicago, or, perhaps, may not have thought them desirable guarantors. Though Slade continued in the service of plaintiffs, yet, for aught defendants knew (as appears from this portion of the case) he may, on plaintiff rejecting these defendants, have gotten others. Plaintiff surely had the privilege of rejecting or accepting defendants as guarantors, and surely, unless accepted, no liability [389] attached. Certainly it is no uncommon thing for proffered surety to be rejected. These remarks which we believe to be supported by the cases of Mosby v. Tinkler, 1 C. M. & R. 692; Beckham v. Hale, 17 John. 134, 139; Mussey v. Rayner, 22 Pick. 223; Kay v. Allen, 9 Pa. St. 320; Craft v. Isham, 13 Conn. 33; Allen v. Pike, 3 Cush. 238; Milroy v. Quinn, 69 Ind. 406, we prefer not to be interpreted as a decision of the question, or as binding upon us as a precedent, for the reason that there remains a ground in the record sufficiently clear and comprehensive to dispose of the case. That ground is, that, while plaintiffs did not give defendants notice that they accepted them as guarantors, yet defendants had knowledge that they were so accepted. Two of them addressed a letter to plaintiffs expressly showing that they considered themselves guarantors for Slade, and the face of the case fairly shows that all of them so understood it. This is sufficient. Knowledge of being accepted as guarantors is the material matter. It is not necessary to inquire how the knowledge is acquired. No form of notice is necessary, and no specific channel of information need be sought. 1 Brandt on Suretyship & Guaranty, sec. 204. It follows that the judgment should be affirmed. All concur.