Sears v. Swift & Co.

Mr. Justice Waterman delivered the opinion of the Court. If the guaranty is to be construed, as is urged, as applying only to purchases that had then been made, the clause that it could be revoked upon ten days written notice becomes an absurdity. Being a continuing guaranty, were the guarantors entitled to notice of the acceptance thereof ? Where there is a mere proposal to guarantee, there is no meeting of minds until the offer is accepted, and notice to the guarantor of the acceptance of his offer is necessary in order to bind him. A. & E. Ency. of Law, Vol. 9-78; Ruffner v. Love, 33 Ill. App. 601; Neagle v. Sprague, 63 Ill. App. 25. Until acceptance, there is no consideration for such mere offer, and notice that a contract has, by the acceptance, been made, is necessary. Where, however, the guarantor receives a consideration for his guaranty, and this is known to him who accepts it, and the words of the guaranty are certain and clearly show an intention to be bound as soon as the promise is delivered, notice of acceptance is unnecessary. In Davis v. Wells, 104 U. S. 159-167, the court said: “We think that the instrument Sued on is not a mere unaccepted proposal. It carries upon its face conclusive evidence that it had been accepted by Wells, Fargo & Go., and that it was understood and intended to be, on delivery to them, as it took place, a complete and perfect obligation of guaranty. That evidence we find in the words ‘ for and in consideration of one dollar to us paid by Wells, Fargo & Co., the receipt of which is hereby acknowledged, we hereby guarantee,’ etc. How can that recital be true, unless the covenant of guaranty has been made with the assent of Wells, Fargo & Co., communicated to the guarantors? Wells, Fargo & Co. had not only assented to it, but had paid value for it, and that into the very hands of the guarantors, as they by the instrument itself acknowledge. It is not material that the expressed consideration is nominal. That point was made, as to a guaranty, substantially the same as this, in the case of Lawrence v. McCalmont, 2 How. 426, 452, and was overruled. Hr. Justice Story said : ‘The guarantor acknowledged the receipt of the one dollar, and is now estopped to deny it. If she has not recovered it, she would now be entitled to recover it. A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of fraud, sufficient to support an action on any parol contract, and this is equally true as to contracts of guaranty, as to other contracts. A stipulation in consideration of one dollar is just as effectual and valuable a consideration as a larger sum stipulated for or paid. The very point arose in Dutchman v. Tooth, 5 Bingham’s Hew Cases, 577, where the guarantor gave a guaranty for the payment of the proceeds of the goods the guarantee has consigned to his brother, and also all future shipments the guarantee might make in consideration of two shillings and sixpence paid him, the guarantor. And the court held the guaranty good, and the consideration sufficient.’ . It is worthy of note that in the case from which this extract is taken, the guaranty was substantially the same as that in the present case, and that no question was made as to a notice of acceptance. It seems to have been treated as a complete contract by force of its terms. It does not affect the conclusion, based on these views, that the present guaranty was for future advances as well as an existing debt. It can not, therefore, be treated as if it were an engagement, in which the only consideration was the future credit solicited and expected. The recital of the consideration, paid by the guarantee to the guarantor shows a completed contract, based upon the mutual assent of the parties; and if it is a contract at all, it is one for all the purposes expressed in it. It is an entirety, and can not be separated into distinct parts. The covenant is single, and can not be subjected in its interpretation to the operation of two diverse rules. Of course the instrument takes effect only.upon delivery.” See, also, Taylor et al. v. Tolman Co., 47 Ill. App. 264; Estate of Rapp v. Phœnix Ins. Co., 113 Ill. 390; Taussig v. Reid, 145 Ill. 488. The judgment of the Superior Court is affirmed.