Fargo Mercantile Co. v. Johnson

171 N.W. 609 | N.D. | 1919

Birdzell, J.

Plaintiff appeals from a judgment in its favor, which was entered in the district court of Cass county, for the sum of $463.95. The action was predicated upon the following contract of guaranty:

Whereas, Everybody’s Store of Fargo, North Dakota,, desires to purchase goods, wares, and merchandise on credit of the Fargo Mercantile Company of Fargo,- North Dakota,

Now, therefore, in consideration of such sales on credit by the Fargo Mercantile Company, we do hereby promise, agree, and undertake that said Everybody’s Store shall pay for all goods, wares, and merchandise sold and to be sold as aforesaid; whether said indebtedness is in the form of notes, bills, or open account; and we do hereby waive notice of acceptance, sales, and deliveries and accounts of credit given as aforesaid and extensions of time of payment. It is understood and agreed that this is an open and continuing guaranty to the amount hereinafter named, and shall continue in force notwithstanding any change in the form of such indebtedness or renewals or extensions granted. And in consideration of such sales and deliveries, we do hereby guarantee payment of all claims above mentioned to the amount of fifteen hundred ($1,500) dollars.

Martin E. Johnson

C. E. Hamilton.

Witness: C. H. Lavell,

Dated at Fargo, N. D., Sept. 14, 1914.

The plaintiff claimed that, under the above contract, it was entitled to the sum of $1,329 and interest, which represents the balance due it upon the account of Everybody’s Store. It appears that, at the date of the execution of the foregoing guaranty contract, Everybody’s Store was owing to the plaintiff on account for goods $1,233.36. Subsequent to the execution of the guaranty, additional credit was extended, amounting to several hundred dollars. Everybody’s Store became involved and went into bankruptcy. In ruling upon the testimony offered during the trial, the court held that the guaranty contract related only to goods sold after its date, and that it could not be construed as affording additional security for the balance due at the time of its execution. This ruling presents the only question that is involved upon this appeal.

It is our opinion that the guaranty contract is one in which the defendants undertook to secure to the plaintiff the account of Everybody’s Store up to the amount of $1,500, regardless of the date or time that the goods entering into the account were sold. It is a continuing guaranty calculated to induce tbe recipient to extend tbe limited line of credit to tbe one whose account is guaranteed, or, if credit bad already been extended for a portion of tbe amount, of inducing tbe recipient to refrain from taking means of collection to tbe possible detriment of tbe principal debtor; Under tbe express language of tbe contract, tbe agreement is to pay for all goods, wares, and merchandise “sold and to be sold as aforesaidEffect cannot be given to this language without bolding tbe contract applicable to merchandise sold prior to its execution. It seems to us that tbe contract is unambiguous, and from this it follows as a consequence that- tbe court, erred in sustaining objections to tbe introduction of tbe plaintiff’s books of account going to show tbe state of tbe account of tbe principal debtor on September 14, 1914.

It is unnecessary to consider tbe other assignments of error. Tbe judgment is reversed and tbe cause remanded for a new trial

KobiNSON and Gbaoe, JJ., dissent.