228 N.W. 809 | S.D. | 1930
This is an action on a written guaranty signed by the defendants in words and figures as follows, omitting attestation and signatures: “In consideration of the deposit of Two Thousand by the First National Life Insurance Company of Pierre, S. D., in the Driscoll 'State Bank, of Driscoll, N. D., we hereby guaranty the payment of all certificates of deposit given the said Driscoll .State Bank, to the said First National Life Insurance Company, and all such certificates that may be given during the years, 1921 and 1922.” Plaintiff has succeeded to the rights of the First National Life Insurance Company, named therein. The guarantors, defendants herein, were all stockholders of the Driscoll .State Bank named in the instrument. O. T. Billington was the cashier
The principal contention is that, until acceptance by the company and notice of such acceptance given to each signer, the trans
The instrument on its face purports to be a guaranty and not an offer to guaranty. It purports to be made upon a present consideration which was paid to and accepted by the bank.
•Section 1479, R. C. 1919, provides: “A mere offer to guaranty is not binding until notice of its acceptance is communicated by the guarantee to the guarantor; but an absolute guaranty is binding upon the guarantor without notice of acceptance.”
The preceding section 1478, subd. 2, provides that the promise is an original obligation: “Where the creditor parts with value or enters into an obligation, in consideration of the obligation in respect to which the promise is made, in terms or under circumstances such as to render the party making the promise the principal debtor, and the person in whose behalf it is made his surety.”
Both in its- terms and the circumstances under which the guaranty'was given in this case the instrument is an original obligation governed by the usual rules of contract as to acceptance. Paying the consideration, retaining the instrument, and acting thereunder was an acceptance of the offer to enter into an original obligation, and both contracting parties were bound by the terms of their agreement. In Deering & Co. v. Mortell, 21 S. D. 159, no N. W. 86, 16 L. R. A. (N. S.) 352, a note to the case in L. R. A. referring to the many apparently diverse and contradictory opinions of the courts as to the necessity of notice, -concludes that the contra
The contract here involved does not seem to present any difficulty in its application to the facts. As before mentioned appellants seem to admit that, if they had signed the form prepared by Martindale and sent it to the company, they would have been bound upon an absolute guaranty without notice of its acceptance. Yet that form could 'hardly have been more absolute in 'its text than is the one in suit. If this is not equally binding without notice of acceptance, it must be because of the circumstances of its execution and delivery.- What are those circumstances? Appellants lay stress on the testimony of Mall and Elwell, to the effect that Bil-lington said the instrument was not what the company wanted, but he would send it in and see if it would be considered, and, if accepted, they (the guarantors) would be notified. But Billington was not the company’s agent to procure the guaranty. He was the agent of the guarantors to effect acceptance, and all were agents of the bank in an effort to secure deposits. There does not seem to be any more reason for holding the guaranty a collateral undertaking than there would be for holding a note a collateral undertaking if one had been given for a loan to the bank. But it is argued that the mere retention of the guaranty and deposit thereafter of $2,000 is not evidence of acceptance, because the company theretofore had been making similar deposits without security and the guarantors could not know that the company had changed its former course and were then making deposits on the security of the guaranty. This is fanciful when it is considered the company had declined to make further deposits without security, and thereafter Billington had made a special trip to Huron to inform appellants of the need of such deposits and his inability to procure them without security. None of the circumstances support appellants’ contention, but on the -contrary they are such as to plainly establish the intention of the guarantors to give an original undertaking. That such undertakings are binding without notice of
Finding no prejudicial error in the record, the judgment and order appealed from are affirmed.