Williamson Heater Co. v. Whitmer

Weaver, J. [1116] 1' tion^uSputea faots' [1115] On September 29, 1917, a partnership known as Denkman & Herms was doing business at Sioux City, Iowa. [1116] Tbe firm was at that time indebted to the Williamson Heater Company, a corporation at Cincinnati, Ohio, in the sum of $1,042.08. In consideration of an extension of the time for payment of this sum, then past due, the defendant herein, George ft. Whitmer, entered into a written contract of guaranty, the material terms of which were stated in the following words: “Now, therefore, it is hereby agreed that in the consideration of the said The Williamson Heater. Company granting an extension of the time of payment and evidencing of the said indebtedness by the taking and accepting of three certain promissory notes of even date herewith, payable to the said The Williamson Heater Company and described as follows, to wit: One for $347.36 dollars, due sixty days from this date. One for $347.36 dollars, due ninety days from this date. One for $347.36 dollars, due 120 days from this date, with interest at 6 per cent and each and all signed by the said Denkman & Herms, and payable at the Bankers Loan & Trust Company’s office in Sioux City, Iowa, the said Geo. R. Whitmer hereby agrees to and does hereby promise and agree that in ease the said notes and each of them, on or before the respective maturity dates, thereof, or within a reasonable time thereafter, are sent for collection to the said Bankers Loan & Trust Company of Sioux City, Iowa, he will either collect and promptly remit the proceeds and full amount due upon each and every one of the said promissory notes, or if the said promissory notes and each and all of them be not collected and paid to the said Bankers Loan & Trust Company promptly upon their maturity, or within thirty days thereafter, he, the said George R. Whitmer, will promptly pay the said notes and each and all of them himself and remit the full amount of each and all of said notes to the said The Williamson Heater Company at Cincinnati Ohio. [Signed] G. R. Whitmer.” The first of the series of three notes, due November 28, 1917, appears to have been paid. The other two notes being still unpaid, this action was brought to collect the amount thereof upon defendant’s contract of warranty. Appearing to the action, defendant resists plaintiff’s demand and denies liability on the guaranty, because of the alleged failure of the plaintiff to [1117] comply with the conditions of such guaranty. It will be noted by reference to the above-quoted terms of the contract that the defendant’s agreement is that: “In case the said notes and each of them on or before the respective maturity dates thereof or within reasonable time threafter are sent for collection to the Bankers Loan & Trust Company of Siou? City, Iowa, he will either collect and promptly remit the full amount due on the notes, or if such indebtedness be not collected and paid to the Bankers Loan & Trust Company promptly upon its maturity or within thirty days thereafter then he, the said George R. Whitmer, will himself promptly pay the notes in full.” 2. GUARANTY: construction. The guaranty so given appears to have been without any consideration moving to the defendant, but the extension of time to Denkman & Herms was doubtless sufficient consideration to support it, if the conditions thereof were duly observed by the holder of the notes. One who undertakes to guarantee payment of the debt of another has the right to make the terms and conditions upon which he will assume the burden; and if the conditions so prescribed are not complied with or waived, the guarantor is discharged. As said by this court in Schoonover v. Osborne Bros., 108 Iowa 453, 457: “A contract of guaranty or suretyship is said to be strictis-simi juris, and one in which the guarantor has the right to prescribe the exact terms upon which he will enter into the obligation, and to insist on his discharge if those terms are not observed. It is not a question whether he is harmed by a deviation to which he has not assented. ’ ’ The plaintiff in this case did not send the notes or either of them to the Bankers Loan & Trust Company for collection, either on or before their respeotive maturity dates. Did it send them to the said Loan & Trust Company “within a reasonable time thereafter ? ” It is shown that, when plaintiff received the notes, it deposited them for credit with a bank at Norwood, Ohio. Shortly before the due date of the first of the unpaid notes, the Norwood bank forwarded it for collection, not to the Bankers Loan & Trust Company, but to the National Bank of Commerce, at Sioux City, Iowa. Since it was not paid upon presentation, [1118] the Bank of Commerce returned it to the Norwood bank, which redelivered it to the plaintiff. We return now, for the moment, to the last note, which fell due January 28,1918. Before the due daté arrived, the Norwood bank forwarded it for collection, but again sent it, not to the Bankers Loan & Trust Company, but to the First National Bank of Sioux City. Not being paid upon presentation, this note also was returned to plaintiff, through the Norwood bank. On February 6, 1918, plaintiff sent both notes directly to the Bankers Loan & Trust Company, stating that the makers thereof had failed to pay the same, and asking the bank to present them to the defendant, Whitmer, and demand payment under his contract of guaranty. It should be said also that, at this time, Denkman & Herms had become involved in bankruptcy proceedings, and that, on January 29, 1918,- — nine days before the notes were finally sent the Bankers Loan & Trust Company, with instructions to make demand of the guarantor,- — Whitmer had written the plaintiff, complaining of their alleged failure to observe the conditions of his guaranty, and saying that, had plaintiff acted in accordance with such terms, he could have secured payment from the makers of the note. For the reasons so alleged, he claimed to be discharged from further obligation. The issue presented for our consideration involves the single question whether the court erred in holding, as a matter of law, that plaintiff had fully complied with the conditions of the defendant’s guaranty. Except for the modifying clause, "or within a reasonable time thereafter,” which follows the words fixing the date when the notes are to be sent to the Bankers Loan & Trust Company, we should have no hesitation in saying that the delay of which appellant complains was, as a matter of law, sufficient to discharge the guarantor; but the modification just referred to indicates that literal exactness in the date was not to be essential, so long as the delay, if any, did not operate to unreasonably prejudice the defendant. Such being the case, we next have to inquire whether the court may say that the proved or admitted delay was or was not unreasonable, as a matter of law. Upon this proposition the trial court held with the plaintiff, and di [1119] reeled a verdict in its favor. A reasonable time'is defined by counsel for appellee as being “such time as is r$ec§ssary, under the circumstances, for a reasonably prudent and diligent man to do conveniently what the contract or duty; 'reqlii3?es should be done, having regard for the rights, and possibly thfe loss, if any, to the other party affected; ’ ’ and this, for tlj,e purposes of the instant case, may be accepted as sufficiently accurate^ 'Counsel also state that “the better view and the; weight of authority is to the effect that what constitutes a reasonable time is a mixed question of law and fact, to be decided by the jury undei the direction of the court on a general verdict, .or to be decided by the court, where' the facts are undisputed. ’1 With, a modification of the final clause, this quoted definition may also be’taken as a fair statement of the applicable law. That there* is no conflict of evidence does not always or necessarily make the question one of law for the court, if, upon the circumstances considered as a whole, fair-minded and intelligent men* may reach different conclusions. Citizens ’ Bank v. First Nat. Bank, 135 Iowa 605. There is not perfect accord in the precedents, and eases may be found going to the extreme f)f holding that, in all cases, the interval of time being shown, the question whether it is “reasonable” is for the court; but such view*has never had the approval of this court. The general proposition is*as stated by counsel: That whether the provedjor admitted time is reasonable is a mixed question of law and fact* asid is, therefore, to be submitted to the jury. There is in this case no serious dispute over the facts, but we think it cannot be said that but one conclusion can be drawn therefrom. The contract sued n^pon is not a*general guaranty. It is not an unconditional guaranty. It is both special and conditional. To recover thereon, ft is not sufficient to show that Denkman & Herms had not paijp* their notes,'but it must affirmatively appear that the appellee had .performed or complied with the conditions upon which the guarantor promised to be bound. What is a reasonable time for such performance depends not alone on the words of the contract, but is-^often affected very materially by the circumstances attendant upon the making pf such contract. Now, it is fairly inferable frpm the record that, at the date of this transaction, Denkman & Herms were in finan1120 eial straits; that they Were indebted in a considerable stun, to the appellee ;,thpt appellee was, demanding security as the price of an extension pf the time, of payment; that, to obtain such extension, the dpíendanA was solicited to become a guarantor of the Plaim, which he <|ld. In so doing, however, he sought to linlit his liability j^ijlihin strict and narrow bounds, and conditioned his jirojuise upon* the plaintiff’s promptly sending the notes for collection on br before their maturity, or within reasonable timfí 'thereafter, to a specifically designated bank, a bank*of which defendant was himself president. Just why he #imposed this/conditjon is not explained; nor is it material that an explanation be offered, for it was his right to prescribe the conditions 0;n which' he would undertake to pay the debt of another; but it is not an unhatural supposition that, knowing the embarrassed condition of Denkman & Herms, he wished to have the paper presented promptly, when due, and at a place where, by reason of his oWñ relations-to the named bank, or for other personal reasons, he thought h^ could best protect himself from liability.* ‘Vtf'e, do not undertake to say what weight or effect should be -given to„ thise’ and ot]pr circumstances attending the making of the contract, but we regard it as quite clear that together they make up a? cp.se which should have been submitted to the jury. . ' The assignment of éSrpr upon the ruling below directing a verdict for the pl^ntiff is,'therefore, sustained. The judgment appealed from is reversed, _and cause remanded for a new trial. —Reversed. Evans, C. J.,^Preston ancjfDE Graff, JJ., concur.