278 Mass. 502 | Mass. | 1932
This is an action on a guaranty. The contract guaranteed was executed by the Rockwell Lumber Company of Cleveland, Ohio, and the plaintiff. The guaranty was executed on the same date by the defendant, then the president of the lumber company, and by one McIntyre, then its treasurer, as guarantors.
There is no dispute that there has been a breach of the contract between the plaintiff and the Rockwell Lumber Company; and that, if liability exists, the amount due is
The contract of guaranty provided that "the liability hereunder is and shall be direct and in all respects unconditional, and shall continue until said Manufacturers’ Finance Company receives written notice revoking said liability as to future transactions.” It was a binding contract upon a present consideration, and could be terminated only upon compliance with its terms. Zimetbaum v. Berenson, 267 Mass. 250, 254. The defendant resigned as an officer of the Rockwell Lumber Company on August 3, 1927, and disposed of all the stock which he held in it. Since then he has not been connected with it. At that time, he wrote to the plaintiff: "Effective this date my resignation as president and a director of the Rockwell Lumber Company has been accepted and I have severed all connection and interests in that company.” This is the revocation relied upon. In the opinion of a majority of the court it is not a sufficient notice to terminate his liability. Assuming, what the plaintiff denies, that such a letter was received, it does not state the intention no longer to be liable for future transactions under the contract guaranteed with sufficient distinctness to affect the plaintiff with the notice to which it was entitled. For all that was stated, he might still be understood to be bound by his guaranty. Liability as guarantor was not conditioned by a status as office holder, stockholder, or employee of the lumber company. This status is all that the letter dealt with. There was nothing set out incompatible with a continued liability as guarantor of the company’s performance of its contract with the plaintiff. The written contract of guaranty bore at its head in large letters: "the
The testimony of the plaintiff’s secretary that if he had received such a letter he should have thought the writer “wanted ... to get out” of his future liability, and would have replied that the plaintiff “insisted on his staying on,” far from showing that the notice was sufficient, emphasized its insufficiency. The plaintiff was helpless against a proper notice. It could not legally reject a sufficient notice and deprive the defendant of his contract right to put an end to liability for future transactions. See R. H. White Co. v. Jerome H. Remick & Co. 198 Mass. 41. William Filene’s Sons Co. v. Lothrop, 243 Mass. 214.
The contract of April 28, 1928, dealt with a situation which arose after the defendant left the lumber company, and of which he had no full knowledge till shortly before the trial. In violation of the contract of September 23, 1925, certain things took place, which exposed McIntyre to prosecution. By the provisions of the April contract the plaintiff agreed among other things, on certain conditions, so long as the parties other than the plaintiff performed the agreements and promises of that contract that “it will not resort to legal'action against said ‘Lumber Company’, to enforce its said claims against it.” The lumber company agreed to discharge all its indebtedness to the plaintiff on or before July 1,1930. In substance the time for performance of some of its obligations was extended as a result. There was a failure to exercise a right which the plaintiff possessed.
It is familiar law that a creditor, who gives further time to a debtor, releases sureties of the contract so extended unless the surety assents to the extension of time or the creditor reserves his right against the surety. See Lascelles v. Clark, 204 Mass. 362, 373; Bishop v. Eaton, 161 Mass. 496, 501; Kenworthy v. Sawyer, 125 Mass. 28, 30; Schwartz v. American Surety Co. of New York, 231 Mass. 490, 493.
No reservation of rights against the defendant as guarantor was made in the contract of April, 1928. The defendant
The order directing a verdict for the plaintiff was proper. There was no contention at the trial that the defendant was not hable, if, as matter of law, the evidence failed to sustain findings of a valid notice to terminate liability or of an extension of time of payment which released him. Neither of the defences could be sustained on the evidence. As matter of law, liability in the amount agreed was established.
We have discussed the exceptions that have been argued. All else is treated as waived under the familiar rule. In the opinion of a majority of the court the order must be
Exceptions overruled.