W. T. Rawleigh Co. v. Brown

108 So. 720 | Miss. | 1926

^* Corpus Juris-Cyc References: Guaranty, 28CJ, p. 927, n. 48; p. 937, n. 41; p. 1028, n. 46; p. 1032, n. 97, 98. The appellant, a corporation of the state of Illinois, sued the appellees as guarantors upon a contract of J. M. Dyar for certain merchandise furnished to Dyar by the appellant, and for which Dyar failed to pay. The appellees, guarantors on the contract of Dyar, defended below on the ground of fraud, which question was decided by the jury in favor of the guarantors. The appeal is from this judgment.

The case is this:

J.M. Dyar contracted with the appellant Rawleigh Company to purchase certain merchandise, which Dyar then retailed to different persons in Jones county, Miss. The appellees, Brown, Barnes, and Stutts, signed an agreement guaranteeing the payment of any amount that Dyar might owe appellant, for goods and merchandise furnished to him, under the contract between them. This guaranty was signed by the guarantors and Dyar, and then forwarded to the appellant at its domicile in Illinois, where the contract of guaranty was accepted, and the goods and merchandise were thereafter sold and delivered to Dyar.

In the course of time Dyar failed to pay for the goods and merchandise furnished him by appellant, and this suit was brought against the guarantors to recover the balance due by Dyar on the indebtedness. At the time the appellees became guarantors, Dyar was then indebted to appellant for goods sold to him on a prior contract. The amount of this indebtedness, and such future indebtedness as might be incurred by Dyar, was covered by the guaranty of the appellees on the contract involved in this suit.

Dyar made certain false representations to the guarantors that induced them to sign the guaranty, so they testified; these representations were that Dyar was in good standing with appellant, owed nothing, and that he had a letter from appellant stating "that he had a clean slate," etc. The testimony of Dyar in this regard was objected to, but was admitted by the lower court.

The defendants below also pleaded that the contract was secured by fraud, in that the appellant had fraudulently suggested and advised Dyar to sell the goods on credit to responsible parties, which would increase the sales, and that it was the fraudulent purpose of appellant to mislead Dyar, and cause him to buy more goods and load himself up to the point where he could not pay for the merchandise. The testimony in the case shows that the appellant would send out suggestions in a guide book to its customers as to how to increase sales, etc. The theory of the appellees seems to have been that the advice thus given by appellant to its customers was fraudulent, in that it caused Dyar to purchase more goods than he was able to pay for, and upon this issue of fraud the case went to the jury. Other theories of fraud were also pleaded and presented in the lower court, but they are so devoid of merit that we shall not mention any of them.

We think the false statement of Dyar to the appellee guarantors that he was in good standing with appellant, etc., was inadmissible in evidence, because the appellant, who accepted the guaranty sent to it in Illinois, had no knowledge of the statement of Dyar to the guarantors, nor did Dyar have any authority to bind appellant by such statement. Dyar was the principal in the bond, and the appellees were the guarantors, and the obligee was not bound by anything that occurred between the principal and the obligors which might have induced the obligors to sign the bond. Therefore no fraud is shown in this case, so far as the alleged false representations made by Dyar to appellees. Colt Co. v. Odom, 136 Miss. 651, 101 So. 853;Cresap v. Furst Thomas, 105 So. 848.

The other theory of fraud which the jury passed upon — that is, that the appellant fraudulently purposed to oversell Dyar, and thus brought about his failure — is manifestly untenable. We have read the testimony in the record in support of this theory, and we are unable to see wherein the appellant perpetrated any fraud in advising Dyar, or in carrying out its contract with him. We see no useful purpose in discussing the testimony in detail, but deem it sufficient to say that no fraud is shown by the proof. Therefore the lower court erred in submitting the question of fraud to the jury.

The case is simply another instance of accommodating friends guaranteeing the fulfillment of a contract by another who failed in his undertaking. Contracts must be enforced as written, even though it results in a hardship upon those who undertake to guarantee the success of the principal in the contract. This court has rendered several decisions supporting the views set forth above; therefore the judgment of the lower court is reversed, and judgment rendered here for appellant.

Reversed, and judgment here for appellant.

Reversed.