Hines & Smith Co. v. Green

118 A. 296, 121 Me. 478, 1922 Me. LEXIS 85
CourtSupreme Judicial Court of Maine
DecidedSeptember 27, 1922
StatusPublished
Cited by3 cases

This text of 118 A. 296 (Hines & Smith Co. v. Green) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hines & Smith Co. v. Green, 118 A. 296, 121 Me. 478, 1922 Me. LEXIS 85 (Me. 1922).

Opinion

Philbrook, J.

Action of assumpsit to recover the price of automobile tires which, upon the written order of one J. M. Agel, were, by the plaintiff, shipped and charged to Agel. It is not claimed that the delivery of the merchandise to Agel contained any element of benefit to the defendant, but it is claimed by the plaintiff that the defendant is an original promisor to pay for the merchandise. This the defendant denies and says that if he made any promise, which he strenuously insists he did not, that such promise was a collateral one and not enforceable because of R. S., Chap. 114, Sec. 1, Par. II, commonly known as the Statute of Frauds. A verdict was rendered in behalf of the plaintiff. No exceptions to any rulings or instructions of the presiding Justice are presented, but by motion, based upon the customary grounds, the defendant seeks to have that verdict set aside and a new trial granted.

The test to decide whether one promising to pay the debt of another is an original debtor, or a guarantor, is whether the credit [480]*480was given to the person receiving the goods. Doyle v. White, 26 Maine, 341; Fairbanks v. Barker, 115 Maine, 11. It is well understood that the obligation is- original if the promise is made at the time, or before the debt is created, and the credit is given solely to the promisor, but is collateral if the promise is merely super-added to the promise of another to pay the debjfc, he remaining primarily liable. Security Bank Note Co. v. Shrader Ann. Cas. 1914 A, note at Page 490. If the merchandise be sold in any part upon the credit of,the third person to whom it was delivered, and the promise of another to pay, upon which the vendor relies, is an oral one, then such promise is collateral, is within the statute, and cannot be enforced. Starkey v. Lewin, 118 Maine, 87; The court of South Dakota, in Wood v. Dodge, a case frequently cited, reported in 120 N. W. 774, says, “The rule in this class of cases seems to be well settled. An oral promise to pay for goods furnished at the promisor’s request to a third person is not valid if the transaction is wholly or partly upon the credit of the third person so as to create a debt against him to which the oral promise is merely collateral. If any credit whatever is given to the third person, so that he is in any degree liable, the oral promise is not valid.”

Intention.

In ascertaining to whom credit was extended, the intention of the parties must govern. This intention should be ascertained from the words used in making the promise, the situation of the parties, and all the circumstances surrounding the transaction. The real character of the promise does not depend altogether on the form of expression, but largely on the situation of the parties; and the questioh is, always, what the parties mutually understood by the language, whether they understood it to be a collateral or a direct promise. Davis v. Patrick, 141 U. S., 479; 35 U. S. (Lawyer’s Ed.), 826; Johnson v. Bank, 55 S. E., 394; Security Bank Note Co. v. Shrader, 74 S. E., 416. Our own court, in Smith v. Loomis, 72 Maine, 51, states the principle thus: “Whether the engagement was original or collateral must be determined by the contract itself; although if doubt remains, the particular words which import the promise may be interpreted in the light of attending facts, the nature of the contract, the acts to be done, the time, place and manner of performance, the situation and rela[481]*481tions of the parties, and sometimes even by the aid of the subsequent conduct of the parties showing a practical construction put upon doubtful terms by themselves.” In the same case our court declared that the law is well settled by cases in this State, in Massachusetts and Connecticut, and in the Supreme Court of the United States, first that guaranties are governed by the same rules of construction as other contracts; second, that in cases of ambiguity the language is construed most strongly against the guarantor; third, that it is the duty of the court to ascertain and give effect to the intention of the parties; and, fourth, that in order to arrive at the intention of the parties the circumstances under which, and the purposes for which, the contract was made may be proved and must be kept in view in its construction.

Intention as shown by book charges.

In the note to Mankin v. Jones, 15 L. R. A. (N. S.) 224, the writer, fortifying his statement with many citations, says, “It is well settled that while the manner in which the account has been charged by the creditor in his books of account is very strong evidence, and entitled to great weight in arriving at the intention of the parties to a promise, yet the fact that the account is charged to the debtor is generally held not to be conclusive evidence that credit was extended to the debtor, and the reason for so making the charge is open to explanation.”

“Evidence that the goods sold were charged to the person to whom they were delivered strongly tends to show that the vendor gave credit to him, and relied upon him for payment, and therefore that the promise of another to be answerable for the debt was at most a collateral undertaking. However, this evidence is not conclusive but is open to explanation, and the weight of it is for the jury.” McGowan Commercial Co. v. Midland Coal & Lumber Co., (Mont) 108, Pac. 655; Wood v. Dodge, supra; Security Bank Note Co. v. Shrader, supra.

Question of law or fact.

The issue being based upon an alleged contract, it is generally admitted that when there is no substantial conflict in the evidence [482]*482as to the precise terms of the alleged promise, then the court should decide, as a matter of law, the meaning of the words used which are alleged to constitute the promise, and to decide, as a matter of law, whether the alleged promise is original or collateral. But where the language used, together with the surrounding facts and circumstances, makes it doubtful whether the parties intended, by the promise, to create an original or a collateral obligation, then the intention should be determined by the jury, under proper instructions by the court. 25 R. C. L., 490, and cases there cited; note on Security Bank Note Co. v. Shrader, supra.

The claims made by the parties, as to the facts in the case at bar, somewhat briefly stated, are as follows: The- plaintiff corporation, testifying through Mr. Wellington, its managerj says that it does business at Caribou; that just after dinner on the 13th of March, 1919, a stranger, who turned out to be J. M. Agel, came to the store of the' plaintiff; that as a result of conversation with Mr. Agel he made up a list of the automobile tires charged in the writ; that, upon request of Mr. Agel, he called the defendant, at Presque Isle, by telephone, and told him that a relative of his was there, that he wanted to buy some tires, also that Mr. Agel wanted to know if defendant would be at home that night, as Mr. Agel desired to make a call upon him; that Mr. Agel signed a written order for the tires, tailing a copy of the order with him, and left the store; that in ttíe later hours of the same afternoon Wellington was called by telephone from Presque Isle; that he recognized the calling voice as that of the defendant, who said, “This is Harry Green talking, .... Mr. J. M. Agel is here ....

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118 A. 296, 121 Me. 478, 1922 Me. LEXIS 85, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hines-smith-co-v-green-me-1922.