85 F. 348 | 8th Cir. | 1898
after stating the case as above, delivered the opinion of the court.
The sole question presented by this record which requires consideration is whether the evidence produced on the trial of the case conclusively showed that the guaranty sued upon was canceled by the guarantors, as to future purchases, on June 5, 1895, and from that time forward was held by the plaintiff below simply as security for the payment of the four notes and the sight draft, which were on that day executed in its favor by the Supply Company to settle the indebtedness which it then owed? So the trial court appears to have held, and its ruling to that effect is the only point which is dial longed by the assignment of errors.
It may be conceded that prior to June 5,1895, a proposition bad been made by the plaintiff company, and had been accepted by the Supply Company, which contemplated the cancellation and surrender of the guaranty. This proposition, as at first: made and accepted, required the Supply Company to pay $1,000 in cash, and to execute three notes in equal amounts at 30, 60, and 90 days, which were to be indorsed by tbe board of directors of the supply company individually, in settlement of the then existing indebtedness of the Supply Company, amounting to about $5,744. A modification of this proposition seems to have bien subsequently proposed and assented to, by virtue of which the indorsement of the notes by the directors was waived, but: tbe guaranty was to remain in force as a security for tlieir payment. This arrangement, however, was wholly executory, at least until June 5, 1895, and even then it does not seem to have been carried out according to its terms. Eour notes were executed by the Supply Company at 1, 2, 3, and 4 months, in lieu of three notes at 30, 60, and 90 days, and a sight-draft was drawn for the balance of the indebtedness, instead of paying the same in cash. Moreover, the agreement in question, which contemplated a surrender of the guaranty after the notes given in settlement of the accrued indebtedness had been paid, was negotiated by Charles C. Peters, as president of the Supply Company, and there is no evidence in this record tending to show that he was acting in that behalf by direction of the guarantors, to secure their release from further liability, or that they were even aware of what was being done in
In view of the foregoing facts we are constrained to hold that the court erred in directing a verdict in favor of the plaintiff for the sum of $957.12, and in holding as matter of law that there could be no recovery in excess.of that sum and the accrued interest thereon. The guaranty in suit being unlimited as to time, the delivery of the four notes and the sight draft in settlement of the indebtedness which had occurred prior to June 5, 1895, did not discharge the guarantors from liability for further purchases made by the Supply Conrpamf on the credit of the guaranty, unless the notes and draft were delivered and accepted in pursuance of an understanding by both parties that the delivery of the notes and draft should have that effect; and whether such was the understanding and intent of the parties when the notes and sight draft were delivered, was properly a question for the jury. The burden rested upon, the defendants to show that they had been released from liability on' their guaranty for all goods bought by the Supply Company after June 5, 1895, and it cannot be said that at the conclusion of the trial that fact was so well established that the jury
But, even if we are mistaken in this view of the case, and if the trial court was right in holding, as matter of law, that the plaintiff accepted the notes and drafts in question under the terms of the agreement evidenced by the correspondence, and that it thereby acknowledged that that agreement had been fully executed, yet it is nevertheless true, we think, that there was some evidence before the jury which tended to show that the defendants, subsequent to June 5, 1895, consented to the further use of the guaranty as security for future purchases. As has been stated heretofore, one witness for the plaintiff testified without objection that in June, 1895, Charles C. Peters, the president of the Supply Company, represented to the plaintiff company that the guarantors had consented to let the guaranty stand as security for future purchases, and that all goods thereafter-sold to the Supply Company were sold on the credit of the guaranty. Neither of the defendants testified that they did not give such consent to the use of the guaranty as a means of obtaining credit, subsequent to June 5, 1895; and, even if they had done so, the issue concerning such consent should have been submitted to the jury under proper instruction. It results from these views that the judgment below must be reversed, and the cause remanded for a new trial. It is so ordered.