Paskusz v. Bodner

67 A. 1040, 75 N.J.L. 447, 46 Vroom 447, 1907 N.J. Sup. Ct. LEXIS 52

• Court: Supreme Court of New Jersey
• Decided: November 11, 1907
• Status: Published

Opinion

The opinion of the court was delivered by

Trenchard, J.

This is an appeal from a judgment of the District Court of the city of Passaic in favor of the plaintiffs below.

It was an action to recover from the defendants below as guarantors upon a written guarantee, as follows: '

“Passaic, N. J., May 3d, 1906.

“Mess. J. Paskusz -&. Son:

“Gentlemen — We, the undersigned, do guarantee you to trust Bodner, Berkman & Co. three hundred (300) dollars’ worth of material to be credited to them at the rate of ten or fifteen days’ terms for a term of five months from date. “Obliged. ' Respectfully yours,

“(Signed) Bodner & Sher.”

The plaintiffs and the firm of Bodner, Berkman & Company were both in business in the city of New York before and during the time of the guarantee, and had been dealing on a small cash basis. Bodner, Berkman & Company desired to purchase from the plaintiffs on credit and in larger quantities, and to open an account with them, but plaintiffs refused to extend credit unless they secured a guarantee for the payment of the goods to be purchased by them. Mr. Bodner, of Bodner, Berkman & Company, went to Passaic, drew the guarantee on a letterhead of the defendants, and at his request the defendants signed it.

During the five months covered by the guarantee the plaintiffs sold goods to Bodner, Berkman & Company to the amount of $1,259.20, in bills not exceeding $300 each, on terms of ten days’ credit. The indebtedness upon the account never exceeded $300 at any time. Payments were made by Bodner, Berkman & Company amounting to $1,085.97, leaving a balance of $173.23 due, for which amount the plaintiffs made demand on the principal debtors, but they did not pay the same, and became insolvent in or about October, 1906. The goods making up this balance were sold in September. The court gave judgment in favor of the plaintiffs for the amount of this- balance, with interest.

The sole question is whether the language of this guarantee under the circumstances extended to all moneys due for materials purchased within the five months, the amount of the credit only being limited to $300, or whether the guarantee was for only the first $300 worth of goods sold.

The rule of construction having the support of the weight of authority is to give the instrument that effect which shall best accord with the intention of the parties as manifested by the terms of the guarantee taken in connection with the subject-matter to which it relates. Lewis v. Dwight, 10 Conn. 95; Home Savings Bank v. Hosie, 119 Mich. 116.

The application of this rule to the present case is not free from difficulty. It is not easy to understand all the expressions used in the guarantee. The words “three hundred dollars’ worth of material” of themselves naturally import a limitation upon the amount of goods that were to be sold, but the language following indicates an intent that there should be a running line of credit upon certain terms, to be limited to a period of five months. The expression “for a term of five months from date” must refer to the' time during which sales could be made, and not to the time that credit should run.

We think, therefore, that the guarantee is a continuing one, and extends to all moneys due for materials purchased within five months, the amount of the credit only being limited to $300.

This conclusion seems to be in harmony with the general tenor of judicial decision. Rindge v. Judson, 24 N. Y. 64; Columbia Electrical Supply Co. v. Kemmet, 38 Vroom 18; Hatch v. Hobbs, 78 Mass. (12 Gray) 447; Gates v. McKee, 13 N. Y. (3 Kern) 232; Taussig v. Ried, 145 Ill. 488; Clark v. Burdett, 2 N. Y. Super. Ct. (2 Hall) 197; Bent v. Hartshorn, 42 Mass. (1 Metc.) 24.

The result is that the judgment of the court below is affirmed.