Mathews v. Phelps

28 N.W. 108, 61 Mich. 327, 1886 Mich. LEXIS 901

• Court: Michigan Supreme Court
• Decided: May 6, 1886
• Status: Published

Opinion

Champlin, J.

Suit was brought by the plaintiff against the defendants before a justice of the peace, in which the plaintiff declared against the defendants in an action of assumpsit upon all the common counts, and on a memorandum of suretyship as follows:

“ Detroit, October 22, 1883.

“It is hereby mutually agreed that William E. Moloney and Ralph Phelps, Jr., is to become the surety of CharlesSavenac, for the sale of cigars, to James L. Mathews, to the extent of two hundred dollars.

“Ralph Phelps, Jr.

“ W illiam E. Moloney.”

At the trial in the circuit court, to which the case had been appealed, it appeared that Mathews was a manufacturer of cigars in the city of Detroit, and had entered into an arrangement with Challes Savenac to sell cigars for him, and return the money to Mathews, for which Mathews-was to give five dollars a thousand “all round,” and defendants signed the written agreement above set forth for the purpose of becoming responsible for the money Savenac did not return, and delivered the same to the plaintiff, who thereupon furnished Savenac with samples, and he proceeded to sell cigars for the plaintiff. Under these facts, the court construed.the contract as if it read as follows:

“ Detroit, October 22,1S83.

“ It is hereby mutually agreed that William E. Moloney and Ralph Phelps, Jr., is. to become the surety of Charles Savenac to James L. Mathews, for the sale of cigars, to the extent of two hundred dollars.”

Vo think the court construed the contract of surety-ship correctly, in the light of the surrounding circumstances. If construed literally, it would be meaningless. By the transposition of a single phrase, the intention of the parties is expressed in clear and unambiguous language.

The record further shows that Savenac failed to return to the plaintiff money received by him on the sale of cigars, to the amount of $161).Of. It also appears that the sales made by Savenac for the plaintiff amounted to more than $1,000, and defendants’ counsel contends that the contract of surety-ship did not extend beyond the sale of $200 worth of cigars, and was not continuous; and, plaintiff having received returns exceeding $200, the defendants are not liable in this action. This would be a narrow construction to place upon the terms of the contract. It is the extent of the liability, and not the extent of the sales, that is limited to $200

The general rule arising from the implication of the language used is that when the amount of the liability is limited, and the time is not, the contract should be construed as a continuing guaranty: Gard v. Stevens, 12 Mich. 295.¹

In all cases the contract should be so construed as to carry into effect the intention of the parties ; and such intent must be ascertained from the language of the instrument, and the facts and circumstances attending the execution thereof.²

Yiewing the contract under consideration in the light of the circumstances under which it was made, it is plain that the guaranty was intended to continue so long as Savenac should continue to sell cigars for Mathews, or until ended by notice from the sureties that they would not continue to be responsible any longer; the extent of their liability being fixed at $200.

The court permitted plaintiff to testify to admissions of defendant Phelps as to the liability of defendants upon the contract. This the counsel for defendants insists is error, for the reason that admissions made by Phelps could not bind his co-surety, Moloney. The admissions of a copartner and of a joint contractor have been held admissible in evidence to bind, not only themselves, but their co-defendants; but whether the admissions of .a surety are proper evidence to bind a co-surety is a question wliich ngpd not be determined in this case. No testimony was introduced- on behalf of defendants. The testimony of the plaintiff made out a case under which he was entitled to recover without the admissions as to liability of defendant Phelps. The error, if any was committed, could not by any possibility have prejudiced the defendants, and the judgment will not be reversed for that reason.

Perceiving no error prejudicial to defendants, the judgment is affirmed.

The other Justices concurred.

1 See Farmers' & Mechanics’ Bank v. Kercheval, 2 Mich. 505.

2 See Switzer v. Pinconning Mfg. Co., 59 Mich. 488.