Martinez v. Cathey

215 S.W. 370, 1919 Tex. App. LEXIS 1036

• Court: Court of Appeals of Texas
• Decided: June 7, 1919
• Docket: No. 8159.
• Status: Published

Opinion

RAINEY, C. J.

Appellant sued appellees Cathey and Champion and their sureties to recover $4,015.07, moneys advanced to them in attempting to comply with a contract entered into by appellant, called party of the first part, and Cathey and Champion, named parties of the second part, wherein the parties of the second part agreed to give their entire time and to devote their best energies to the selling and pushing of the goods handled by the party of the first part in said territory therein named, and to sell said goods only at prices fixed by the party of the first part, in the state- of Kansas, including Kansas City, Mo., except the towns of Coffey-ville, Parsons, and Pittsburg, for a period of not Tess than one year, but the contract to run six years, with the right of either party to terminate it upon certain conditions.

“Plaintiff further alleged that, in connection with said contract and as a part thereof, and before its delivery to and acceptance by the plaintiff, the said F. W. Cathey and W. F. Champion, as principals, and H. F. Mercer, J. J. Pitchford, Toney Dorsa, V. B. Littlejohn, J. M. Broadhurst, and W. A. Cathey,, as sureties, executed their bond to plaintiff, pursuant to the twentieth paragraph of said contract above set out; said bond being in words and figures as follows:

“ ‘State of Texas, County of Dallas:

“ ‘Know all men by these presents: That we, F. W. Cathey and W. F. Champion, as principals, and .and .. as sureties, acknowledge ourselves obligated unto and firmly bound to pay to P. P. Martinez, at Dallas, in Dallas county, Texas, the sum of four thousand ($4,000.00) dollars, conditioned, however, that if F. W. pathey and W. F. Champion shall well and truly perform all obligations encumbered upon them under that certain contract dated the 6th day of February, 1915, by 1 and between P. P. Martinez, as party of the first part, and F. W. Cathey and W. F. Champion, as parties of the second part, and shall well and truly pay to the said P. P. Martinez any and all moneys which shall become owing to said P. P. Martinez by F. W. Cathey and W. F. Champion, under the terms of said contract, which is here referred to and made a part hereof, this obligation shall be null and void; otherwise, to remain in full force and effect.’ ”

It was further alleged that Cathey and Champion had abandoned their contract and were owing Martinez $4,015.07, for which judgment was prayed against all defendants. v

Defendants filed a joint answer, consisting of a general demurrer and a general denial, admitting the execution of said contract and bond; that there was no consideration for the execution of said contract and bond; that if the commission earned upon sales by two defendants were; not sufficient to pay plaintiff same was not to be repaid by them; that Martinez refused and failed to furnish sufficient cigars to them with which to fill the orders received, and which orders were not filled, causing the two principal defendants to lose money and render the business unprofitable, and further that Martinez refused to allow them to sell the Don Juarez cigars in Kansas City, which caused them great loss in commissions and took for a time said cigars off tlie market; that Martinez and the two principals changed and modified the contract, making it impossible for the principáis to make a profit, by which he could be repaid, and thereby released the sureties from the bond, and they thereby became released; that Martinez never notified them of his acceptance of them as bondsmen, or notified them of the default of the principals, etc., or gave them notice of the advances made to them.

Appellant replied to said answer by general and special demurrers and denial, and pleaded an estoppel. Defendants filed a trial amendment, and charged Martinez with terminating the contract and pleaded in cross-action for $3,000.

The case was submitted to a jury on special issues, and on the return of answers to the same a judgment was rendered against the principals for $3,458.15, and against appellant for the sureties from which appellant appeals.

Conclusions of Fact.

On February 6, 1915, when the contract between appellant- and appellees was entered into, Martinez was conducting a wholesale and retail cigar business in Texas, Oklahoma, and Arkansas. He engaged Cathey anfd Champion to sell cigars in the state of Kansas, except certain towns, viz. Coffeyville, Parsons, and Pittsburg, but including Kansas City, Mo. They were to sell cigars in ail places in'said territory and pay their own expenses. They were to be remunerated by commissions to be paid by Martinez on cigars sold, Martinez to advance them $425 per month. Said amount was used by said appellees for their own use, and no account made by them of how it was used to Martinez. The contract specifies that Martinez agrees to advance to Cathey and Champion “$425 per month, which sum will be deducted from their commissions.” The contract implies that, if the commissions are not sufficient, Cathey and Champion will be indebted to Martinez for any deficit of the advance made not covered by the commissions. There was a deficit in commissions to pay the advance made of $3,458.15. Part of the time Martinez could not furnish all the cigars necessary for supplying the trade, which caused a loss of commissions to Cathey and Champion, which would- have enabled them to pay back the advances they had received. Martinez advised against the working of Kansas City and the introducing of the Don Juarez cigars, and withdrew them from that territory, which was acquiesced in by Cathey and Champion and which territory was not worked. This was naturally a material change in the contract, and worked a release of the sureties; they not having consented to Martinez did not arbitrarily and without cause fail and refuse to furnish cigars or to fill orders for Cathey and Champion, but by reason of the conditions of the trade he could not have the cigars manufactured fast enough; but he divided such as he got equally with the different sections. 1-Ie promised to fill all orders promptly for Cathey and Champion, which he did not do, but was unreasonably delayed in filling orders as far as the demands of the trade required. it.

Opinion.

[1,2] The bond, which was the basis of this suit, was a contract of security, and not of guaranty, and notice of acceptance of the bond by Martinez was not necessary in order to charge the sureties, nor were the sureties entitled to notice of default on the part of the principals, if they were otherwise exonerated from liability, which we think was the case, as shown by the evidence. The evidence shows that Cathey and Champion contracted with Martinez that they should sell the Don Juarez brand of cigars, and Kansas City was allowed as territory in which to operate; but by the acts of Martinez said brand of cigars was taken off the market for six months, and Martinez did not approve of their operating in Kansas City, and in deference to said disapproval by Martinez Cathey and Champion did not operate in said city. It also shows that at the time Martinez delayed furnishing cigars for sale necessary for the filling of the orders of Ca-they and Champion, causing the loss of sales and an injury to the building up of a trade in that territory, which caused the loss of commissions. The changes and modification of the contract, as just stated, which were tacitly agreed to by the said parties, if not expressly agreed to, caused such a modification and change as worked a discharge of the sureties’ liability, and no recovery was warranted against said sureties. Such acquiescence on the principals’ part did not release them, but left them responsible for their default.

[3] It is contended by Cathey and Champion that under the contract they are not liable to Martinez for any money advanced beyond.their commissions earned. The contract provides:

“Party of the first part agrees to advance parties of the second part the sum of $425 per month, which sum will be deducted from their commissions.”

We think the use to which the $425 advanced monthly was to be put will determine the nature and character of the advance. Ap-pellee Champion testified that— $425 as I saw fit. * - * * He (Mr. Martinez) had nothing to do with the amount X drew each month, or the amount Mrs. Oathey or Mrs. Champion or Mr. Cathey drew each month. It was decided that Mr. Cathey would draw $150, and I $150, and my wife $50', and Mrs. Cathey $75. We agreed on that. * * * When we traveled up there, whatever we spent for hotel bills or railroad fare, or any other expenses of any character, whether we paid it out for medical bills, or sent some down in Texas, or anything else, Mr. Martinez was not consulted in that. AVe did not make him out an itemized statement of our expenses; we spent it as we' saw fit. Mr. Cathey spent his part of it as he saw fit. If I spent part of it for running a house in Wichita, I said nothing to Mr. Martinez about it; he had nothing to do with it.”

“Mr. Martinez had nothing to do with how we divided the $425. I used my part of the

It was not spent for the use and benefit of Martinez in upbuilding Martinez’s business, and we take it from the contract and all the evidence that the advancement was made to enable Cathey and Champion to advance their own trade, and was not intended as a gift by Martinez, but was intended as a loan of that much money. This is further shown by the fact that Martinez furnished Cathey and Champion a statement, every month, showing the amount of advancements as debits, and credits for commissions earned, which was evidenced by their indorsements as “Correct.” Neither ever protested that said amount was not due and owing, and we conclude that said amount of $3,458.15 was owing by Cathey and Champion and that they were liable therefor.

Appellant assigns as error the submission to the jury of special issues Nos. 18 and 19, which are as follows:

Special issue No. 18 was as follows:

“Did Mr. Martinez promise or represent to either or both Mr. Cathey and Mr. Champion, either before or at the time of the execution of < the contract in evidence, in substance that he could and would cause their orders to be shipped promptly, or reasonably promptly filled and shipped?”

Special issue No. 19 was as follows:

“Did Mr. Martinez cause' 'all the orders of Messrs. Cathey and Champion to be as promptly filled and shipped as you have found he represented to or promised them they would be so filled, in the event you have so found in answer to the aforesaid question?”

The following proposition is presented:

“Plaintiff, P. P. Martinez, declared upon a written contract, and therefore any verbal agreement had either before or at ,the time of the execution of the contract, would be irrelevant and immaterial, for the reason that the same would not be binding upon P. P. Martinez, because the contract could not be changed or varied by an oral agreement made prior . to, or contemporaneous with, the- execution of the contract.”

[4] The contract was silent concerning the duty of Martinez on the point as to filling orders solicited by the salesmen, whether promptly or otherwise, and it was not error in the court to allow proof on that point. Magnolia Warehouse & Stor. Co. v. Davis-Blackwell, 108 Tex. 422, 195 S. W. 184.

In the case just above cited Mr. Jones’ Commentaries on Evidence, § 434, is quoted by Mr. Justice Yantis, as follows:

‘.‘The general rule is that parol testimony cannot be, received to contradict, vary, add to, or subtract from the terms of a valid written contract. But one of the exceptions to the general rule is that, if the written instrument itself shows to be either ambiguous or incomplete, parol testimony is admissible to show • what the real contract was to the extent necessary to remove the ambiguity, and to make the contract complete in its terms which show to be incomplete. The exception to the general rule is as well settled as is the rule itself.” '

We have considered all assignments and cross-assignments of error presented, and find none requiring' a reversal of the case, , and the judgment is affirmed.

Affirmed.

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