143 Wis. 377 | Wis. | 1910
This court is asked to reverse the order of the circuit court on the following grounds:
, (1) Because the complaint fails to allege that the plaintiff' accepted and relied on the defendant’s guaranty.
(2) Because the guaranty was limited to $500, and all liability thereunder ceased when the agent, Hull, had paid for the first $500 worth of papers delivered to him under his. contract.
(4) Because plaintiff continued to extend credit to the agent after he had defaulted in making payments that were-due.
1. The first objection is untenable. The complaint alleges that the plaintiff, “by its duly authorized agent, did on said 25th day of February, 1908, and after the execution of' said agreement, notify the said defendant that the said plaintiff accepted the said guarantee and relied .thereon.” This is. a sufficient allegation of acceptance of and reliance on the guaranty. Travelers Ins. Co. v. Hallauer, 131 Wis. 371, 111 N. W. 527; White v. Reed, 15 Conn. 457.
2. In construing contracts of guaranty as in construing other contracts, the important question is, What did the parties intend ? Both of the parties to this contract concede that, the two instruments should be read together. The contract between the plaintiff and the agent, Hull, clearly contemplated that the latter should be supplied with papers for a period of at least six months. Considering the situation of the parties, and the language of the guaranty, we think it was intended that the defendant should become responsible for such papers, as plaintiff might deliver to its agent during the life of the contract, the liability in no event to exceed the sum of $500. In other words, we hold that the guaranty is a continuing: one. A contract precisely similar in terms was so construed by the Michigan court. Detroit Free Press v. Pattengill, 155 Mich. 272, 118 N. W. 927. And while there are some-decisions to the contrary, the decided weight of authority is-to the effect that such a guaranty should be construed as being a continuing rather than a limited one. Gates v. McKee, 13 N. Y. 232; Rindge v. Judson, 24 N. Y. 64; Mathews v. Phelps, 61 Mich. 327, 28 N. W. 108; Lane v. Mayer, 15 Ind. App. 382, 44 N. E. 73; Nat. Bank v. Thomas, 220 Pa. St. 360, 69 Atl. 813; Paskusz v. Bodner, 75 N. J. Law, 447, 67
3. It was not incumbent upon plaintiff to allege that notices of tbe various defaults of tbe principal debtor were given •to tbe defendant from time to time as they occurred. If tbe ■question of notice was material at all, failure to give it is defensive matter that must be pleaded by way of answer. Mamerow v. Nat. L. Co. 206 Ill. 626, 69 N. E. 504; Swisher v. Deering, 204 Ill. 203, 68 N. E. 517, 518; Furst & B. Mfg. Co. v. Black, 111 Ind. 308, 12 N. E. 504, 508; Davis v. Wells, 104 U. S. 159; 20 Cyc. 1465, and cases cited in note 74. Under tbe facts stated in tbe complaint it is, to say tbe least, doubtful if plaintiff was obliged to give notice to defendant of tbe successive defaults. Loverin & B. Co. v. Travis, 135 Wis. 322, 326, 115 N. W. 829. In any event, all tbe law requires is that tbe notice be given witbin a reasonable time. See cases cited sufra. Tbis court could not say as a matter of law that tbe time which elapsed in tbe instant case was unreasonable. We are not informed as to bow .long tbe time was.
4. Lastly it is urged that inasmuch as tbe agent, Hull, was behind in bis payments from and after tbe first month be •operated under bis contract, tbe plaintiff was guilty of bad faith and reckless conduct in continuing shipments during tbe life of tbe contract, and therefore it cannot recover. Tbe mere indulgence of tbe creditor in such a case will not discharge tbe surety. “Beyond tbe bare neglect of the creditor to enforce payment or performance from tbe principal, there must be some act of connivance or gross negligence amounting to wilful shutting of tbe eyes to tbe fraud.” McKechnie v. Ward, 58 N. Y. 541, 549, and cases cited; Monroe Co. v. Otis, 62 N. Y. 88, 94; Howe M. Co. v. Farrington, 82 N. Y. 121, 128; Douglass v. Ferris, 138 N. Y. 192, 206, 33 N. E. 1041; Benjamin v. Hillard, 23 How. 149, 165, 166; Grafton
By the Gourt. — Order affirmed.
