Fluhart v. W. T. Rawleigh Co.

Wood, J., (after stating the facts). Two questions are presented. I. Did the court err in holding that the guarantors could be sued jointly with the principal? The contract between the appellee and Whedbee, the principal debtor, it appears from the recitals therein, was executed on the 24th day of October, 1913. The contract of guaranty bears no date, but the allegations of the complaint, in effect, show that the instruments were executed on the same day and that they were parts of but one and the same transaction. Indeed the recitals of the contract of guaranty referred to the contract between appellee and Whedbee as if it were but a part of the same contract. For instance, the recital “for and in consideration of the extension of further time in which to pay his accounts for goods previously sold to the above party of the second part.” Whedbee is not mentioned eo nomine in the contract of guaranty, but is only referred to as “the above party of the second part,” clearly referring to the contract in which Whedbee is mentioned as “party of the second part.” It occurs to us therefore that the two contracts appear on their face to be parts of the same instrument. There is no way to identify Whedbee as being the “above party of the second part,” except by reading this in connection with the original contract, and the two contracts therefore should be regarded as evidenced by one and the same instrument. The contract of guaranty under review was an unconditional undertaking on the, part of the guarantors to pay appellee the balance shown to be due it by their principal, Whedbee. There was no condition that they would payin the event that appellee could not collect its debt with reasonable diligence from Whedbee. In other words, the liability of the guarantors was fixed by the failure of Whedbee, the principal debtor, to pay the indebtedness incurred by him at maturity. See 12 R. C. L., section 13, page 1064; Yager v. Kentucky Title Co., 66 S. W. 1027; White Sewing Machine Co. v. Powell, 74 S. W. 746; Memphis v. Brown, 87 U. S. 289. There is no limitation in the contract upon the obligation to pay. The guarantors, however, -did. not bind themselves to pay any amount claimed by the appellee to be due it from Whedbee unless he gave appellee a written acknowledgment of his account or unless there was a judgment in appellee’s favor against him. As we construe the contracts, the guarantors and Whedbee bound themselves jointly and severally for the payment of the latter’s debt to the appellee when the same matiired. Section 6009 of Kirby’s Digest provides: “Persons severally liable upon the same contract, including parties to bills of exchange, promissory notes, common orders and checks, and sureties on the same or separate instruments, may all, or any of them * * * be included in the same action, at plaintiff’s option.” And section 6010 provides: “Where two or more persons are jointly bound by a contract, the action may be brought against all or any of them, at the plaintiff’s option.” The Supreme Court of Minnesota, in passing upon a statute precisely similar to section 6009 of Kirby’s Digest, supra, said: “There is no principle of reason which requires two separate suits against parties when one would effect the same object, and every reasoh which can be given for uniting the maker and endorser in one action will apply with equal force to the maker and guarantor. If an endorser is liable on the same instrument with the maker, so is an absolute guarantor of payment, if his undertaking is in the nature of a surety, which is primary, and that of the guarantor properly so called, which is collateral and secondary. And when he guarantees the payment of the debt is in every respect essentially a surety. Moreover, in view of the manifest policy and purpose of the statute, the word ‘surety’ must be understood as including any one who is bound on the same instrument, for its payment with another, who, as between themselves, is the principal debtor. •whatever may be the particular form of the undertaking. If not, the italicized clause (and sureties on the same or separate instruments) in' the statute would be without meaning and effect.” Henry Hammel v. Beardsley, 31 Minn. 314. We approve the above doctrine as applicable to the facts of this record. See also, Marvin v. Adamson, 11 Iowa 373, and other cases cited on this point in appellee’s brief. The ruling of the court therefore was correct in overruling appellants’ motion to dismiss the complaint against them. II. The court erred, however, in rendering judgment in favor of the appellee for the amount claimed. No judgment had been rendered against the principal debtor. He denied that he was indebted to the appellee, and there had been no judicial determination and final judgment as to the issue thus raised. The judgment therefore in favor of the appellee was premature, and for the error in rendering judgment against the appellants, the same is reversed and the cause will be remanded for further proceedings according to law. Humphreys, J., not participating.