277 F. 385 | 8th Cir. | 1921
This was an action upon a written guaranty. At the close of the evidence both parties requested a directed verdict. The court directed a verdict in favor of the plaintiff, and from the judgment this error proceeding is prosecuted. The J. L. Price Brokerage Company were engaged in business at St. Joseph, Mo., as commission merchants. Hicks, Sutherland & Co. were engaged in a similar business at Los Angeles, Cal. The St. Joseph company had made some prior purchases from the Los Angeles company, but, contemplating further purchases, it procured the defendant, hereafter called St. Joseph Bank, to send to the Los Angeles Trust & Savings Bank a telegram reading as follows:
“St. Joseph, Mo. 9 31 A June 8, 1917.
“Los Angeles Trust and Savings Bank. Los Angeles, Calif. We guarantee J. L. Price Brokerage Co. will pay draft drawn by Hicks Sutherland Co.*386 when accompanied with certificate of weights and original bill of lading covering five cars new potatoes sacked draft to be drawn on basis three twenty five cwt. for what the car contains and decking charge ten dollars per ear. Bank of Buchanan Co.”
Upon receipt of the telegram the addressee ascertained that Hicks, Sutherland & Co. were not among its regular customers, but transacted their business with the plaintiff, the Continental National Bank of Los Angeles. The addressee advised the plaintiff of the contents of the telegram, and on the same day, June 8th, the Los Angeles Trust & Savings Bank mailed a letter to the St. Joseph Bank acknowledging receipt of the telegram and advising that the Hicks-Sutherland Company was not a client of that bank, but had given the writer the name of their Los Angeles bankers. The letter then continued:
• “We called up tke Continental National Bank and explained the situation and they stated it would be agreeable to them to negotiate drafts as outlined in your telegram, and requested that we send them your telegram, which request we are pleased to grant. Trusting there will be no objection to the manner in which we have disposed of the matter, and that you appreciate our position, we are,
“Yours truly, Ralph Day, Assistant Cashier.”
About four days are ordinarily required for a letter mailed at Los Angeles to reach a St. Joseph addressee. The St. Joseph Bank received this letter, but made no reply. Between June 14th and June 19th Hicks, Sutherland & Co. loaded and shipped five carloads of new potatoes, consigned to the J. L. Price Brokerage Company on straight bills of lading. At the same dates Hicks, Sutherland & Co. drew five drafts, each addressed to J. L. Price Brokerage Company and signed by Hicks, Sutherland & Co. and payable on demand to the order of the Continental National Bank of Los Angeles for amounts stated. The originals of the bills of lading were attached to these drafts with invoices showing the car, the date of shipment, the consignor, the weight and value of the potatoes, and the charge for decking. These drafts were delivered to the Continental National Bank, which paid Hicks, Sutherland & Co. the amount of the face of the drafts and then sent them with the attached papers to the St. Joseph Bank. No certificates of weights were attached or sent with the drafts. On June 25th or 26th an attorney for the Continental National'Bank was informed at a meeting with officers of the St. Joseph Bank and of the J. L. Price Brokerage Company that payment of the drafts was refused, because the guaranty was not addressed to the Continental National Bank, and because no certificates of weights were attached to the drafts and bills of lading. The cars had arrived at St. Joseph at dates between June 21st and 25th, and the potatoes had been sold by the railway company on dates from June 22d to june 27th, for freight and demurrage charges and as perishable goods. The attorney for the Continental National Bank on June 26th requested his client to procure the certificates of weight and upon obtaining them he exhibited them to the St. Joseph Bank on July 9th and again demanded payment of the drafts which was refused.
The most common application of the principle in the cases cited is to guaranties addressed to one individual and acted upon by another and to guaranties addressed to one firm which has been succeeded by another organization, or in which some change lias occurred by addition or withdrawal from the membership and the claim was made that the guaranty extended to the later firm or company. In the case of Grant v. Naylor, supra, the Supreme Court of the United States by Chief Justice Marshall held that a letter of credit carried by the writer’s son to England and addressed by mistake of the writer to “Messrs. John & Joseph Naylor & Co.,” guarantying the engagements of a firm in which the writer’s son was a partner, did not bind the writer to pay for goods sold by a firm engaged in business at Wakefield, England,under the name of John & Jeremiah Naylor & Co., although the sale was made upon the faith of the letter of credit, and there was no commercial house at Wakefield of the name of John & Joseph Naylor & Co., and the letter was really designed for John and Jeremiah Naylor, because the letter was not ambiguous and was not addressed to the firm that acted upon it. It is to be observed that in most of the cases cited 1he intention of the guarantor to confine his engagement to the person named is shown not only by the formal address or superscription at the beginning of the writing, but is also shown by the use of some pronoun in the body of the guaranty in phrases such as “if you will furnish” or “which you may supply.” While such definiteness affords a facile means of interpretation of the contract, it is not lightly to be inferred that a guaranty is to be taken as general because it is
The St. Joseph Bank may have selected the addressee in its telegram, because it believed that that correspondent would use greater diligence to have the holder present the drafts to the J. L. Price Brokerage
From these considerations it is manifest that the court cannot say that the bank which the guarantor selected is not the only one which it intended to select. The meaning of the guaranty is apparent and limited by its terms to the addressee. If it had been the intention to guaranty the drawer’s drafts to any indorsee, a telegram to the drawer and addressed to no particular indorsee would have been the usual method of granting such credit. There were no words in the guaranty indicating that it was intended for any other bank’s protection. The few cases which bear upon this exact question support the view which has been announced. In Taylor v. Wetmore, 10 Ohio, 491, 494, the guaranty was addressed at the beginning to “Messrs. A. D. McBride & Co.,” and the argument was made that because the body of the guaranty did not say that the guarantors “will be responsible to you” it was therefore a letter of credit to any one who would advance the goods. The court said:
“It seems to us this reasoning is more ingenious than sound. The guaranty being addressed to A. D. McBride & Co., it is to them the defendants speak when they say, ‘We will be responsible to the amount of §2,000and it contains no general terms by which either Farrar or the house of McBride had the authority to transfer it to the plaintiffs, and they to make the defendants their guarantors, without their assent, express or implied.”
In Fletcher v. Burnside, 142 Ga. 803, 83 S. E. 935, a guarantor was held not liable to F. for goods sold to C. because he had written a letter to K. asking him to furnish goods to C. and promising to pay for them, although in pursuance of the letter K. induced F. to sell the goods to C., and the guarantor knew that F. had sold C. the goods in pursuance of his letter to K.
It was not the duty of the St. Joseph Bank to warn the Continental National Bank not to purchase drafts relying on its telegram, but it was the duty of the Continental Bank to await an acceptance of the
The judgment will be reversed, and a new trial ordered.