Bishop Press Co. v. Lowe
Bishop Press Co. v. Lowe
Opinion of the Court
— Plaintiff’s action is based on a contract of guaranty and it obtained judgment against the defendant guarantor in the trial court.
It appears that plaintiff contracted with the “New Empress Advertising Company” that it should.furnish paper and material for 250,000' “program covers” and print them in a workmanlike’ manner for the New Empress Advertising Company which company was to pay plaintiff $1000, therefor. It further appears that defendant entered into the following contract of guaranty with plaintiff, viz, “I hereby guarantee the fulfillment of this contract by the New Empress Advertising-Company and the payment of all money due the Bishop Press from them under this contract.” There was evidence tending to prove that plaintiff furnished the paper (at least in great part) and printed the covers and delivered them to the “New Empress Company,” and that it has not been paid the price it was to receive from the “New Empress Advertising Company.” This action, as above stated, was thereupon instituted against defendant as guarantor.
The case presents the anomaly of the plaintiff making the contract (the payment-of which defendant guaranteed) with a fictitious party. That is, it appears that the contract guaranteed was made between plaintiff and the “New Empress Advertising Company,” whereas there is no such company, the real party being the corporation “New Empress Company.” But plain
In this way an important question arises. Is a guarantor liable to the creditor when the party named as the principal debtor is a fictitious person — a real person having used a fictitious name? Stated differently, A and B, enter into- a contract the latter using a fictitious name, and C, guarantees that the fictitious party will perform the contract, is C liable to A on the guaranty? Leaving out of view the question whether C knew that B, was the real party,- using a fictitious name, we think he would not. For as stated by defendant, a guaranty is a collateral undertaking and it is ■essential to its existence that here should be some one liable as prncipal and if there is no valid claim against a principal there is no existing contract of guaranty. [Saving Bank v. Strother, 22 S. Car. 552, 556.]
In Barns v. Barrow, 61 N. Y. 39, the guaranty was to a particular person and a firm, of which such person was a member, undertook to recover on the guaranty and it was held there was no liability. The court said: “It is a case of pure guaranty; a contract which is said to be strictissinti juris; and one in which the guarantor is entitled to a full disclosure of every point
In Lamm & Co. v. Colcord, 22 Oklahoma, 493, a guarantor guaranteed against the default of O. C. Scoresby and credit was extended to the Scoresby Tailoring Company and there being no proof that Scoresby solely comprised the Tailoring Company it was held that the guarantor was not liable for the default of such Company. At page 500 of the report the court said that ‘the guarantor agreed to answer for the default of O. C. Scoresby. The record shows that upon this instrument of guaranty the goods were furnished the Scoresby Taloring Company. There is no presumption that they were one and the same. A guarantor has the right to prescribe the exact terms upon which he
In Grant v. Naylor, 4 Cranch, 224, it was ruled, in an opinion by Chief Justice Mabshall, that a guarantor’s letter of guaranty addressed by mistake to John and Joseph Naylor but, intended for, and delivered to, John and Jeremiah Naylor, who furnished merchandise to the principal debtor, would not support an action by John and Jeremiah against the guarantor.
In Allison v. Rutledge, 5 Yerg. (Tenn.), 193, the guaranty was addressed to John Allison and acted upon by John and Joseph Allison, it was decided that the guarantor could not be held.
In McGovney v. State of Ohio, 20 Ohio, 93, it was held that a bond describing a testator as James L. Find-ley could not be made applicable to Joseph L. Findley.
In Lyon & Co. v. Plum, 75 N. J. L., 883, it was held that a guaranty to a named partnership, could not apply when a new member ws added or ■ an old one taken away.
In Jordan Marsh & Co. v. Beals, 201 Mass. 163, the decision was that a guaranty to a partnership for the purchases of the principal debtor, could not be enforced by a corporation of the same name which took over its' assets and liabilities, composed of the same persons who made up the partnership and carried on the same business at the same place. And the same was decided in Saunders Co. v. Ducker, 116 Md. 474. Holdings of similar character are found in Smith v. Montgomery, 3 Texas, 199; King v. Batterson, 13 R. I. 117, 120; Penoyer v. Watson, 16 John, 100 and Crane Co. v. Specht, 39 Neb. 123.
But if the guarantor knew that a fictitious person was nurmed for the real party as the principal debtor, we think the liability of a guarantor would attach. For we have already seen that a contract in the name of a fictitious person may be enforced against the real party using the fictitious name. And that being true, we think such a contract should be capable of being guaranteed.
It, however, must be conceded that there is the highest authority for the position that the matter of the intention of the guarantor will not be allowed to control the letter of the contract, expressed without ambiguity. This position is put upon the ground that the contract of a guarantor, being a promise to pay the debt of another, is collateral and, under the Statute of Frauds, must be in writing; and, being in writing, plainly expressed, parol evidence will not be admitted to vary its terms. [Grant v. Naylor, 4 Cranch, 224; Allison v. Rutledge, 5 Yerg. (Tenn.) 193; McGovney v. State of Ohio, 20 Ohio, 93, 99.
But there is a rule of law, long recognized in this State, which, in our opinion, renders the Statute of Frauds inapplicable to the peculiar facts of this case. That rule is that though the- contract is plainly in the name of one person as a party thereto, it may be shown by parol evidence that an undisclosed person is the real party; not as excusing the party - whose name appears in' the contract, for that would contradict the contract, but as merely adding another person to it. The most frequent illustration of this is with an agent and an undisclosed principal. The agent
Now it seems that if it is not. a violation of the Statute of Frauds to show by parol the real party is an unnamed principal, you can show the real party when the party named in the writing is fictitious; for by so doing you are only showing that he has bound himself by another name. While you may not, with propriety, call a fictitious1 name, standing alone, an entity, or a party, yet you may show by parol that it stands for the real person who used it. The only difference between that and an agent is in the fact that the agent has bound himself as his unnamed principal! and the fictitious name has only bound the real party who made use of it; and it can but follow, under the authorities last cited, that the Statute of Frauds is not violated.
The contract was that plaintiff should be paid for the covers as they were received. The proof was that several thousands were delivered without collecting the price and it- was never collected. To the extent of such' deliveries defendant was discharged. In a sale for cash if time or credit be given it is a discharge of the guarantor. [Hunt v. Smith, 17 Wend. 179; 1 Brandt on Suretyship & Guaranty, sec. 377.] The delivery and payment of the price were contemporaneous acts. That the price should be collected WftS manifestly of high protective importance to the
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- BISHOP PRESS COMPANY v. FRANK LOWE
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