Boteler v. Conway

SHINN, J.,

pro

tem.

Appeal by plaintiff and intervener from a judgment in favor of defendant upon a written guaranty.

Plaintiff sues as trustee of the Estate of Lloyd Products, Inc., a corporation, bankrupt, upon a contract of guaranty executed by defendant Jack Conway and upon stockholders’ liability. Intervener Cádwallader-Gibson Co., Inc., a corporation, is interested in the matter in suit by reason of an assignment of plaintiff’s claim to secure an indebtedness to intervener. Lloyd Products, Inc., hereinafter designated as Lloyd, contracted in writing with Monarch Radio Co., Ltd., hereinafter referred to as Monarch, to manufacture and sell to the latter, which agreed to buy, certain radio cabinets at stated prices. The contract provided that 10,000 cabinets were to be made and delivered within a year after the date of the contract, August 29, 1929. Monarch agreed to buy all of its cabinet requirements for one year from Lloyd and was to pay for cabinets according to the design agreed upon, at the rate of $14.50 each. On September 9, 1929, before any cabinets were delivered, the secretary of Monarch and the president of Lloyd, without the knowledge or consent of defendant Conway, made certain written changes in the contract, by which the period of time for the manufacture of 10,000 cabinets was reduced from one year to eight months and the time during which Monarch was to purchase all of its cabinet requirements was reduced from one year to about eight months. The guaranty of Conway upon which suit was brought was .executed on the same day as the contract between the corporations and read as follows: “I, Jack Conway, in consideration of the execution of and the performance of the conditions of said contract by said first party, do hereby personally guarantee all of the payments in this contract specified on the part of the second party to be paid; at the times, of

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the amounts and in the manner in said contract provided. This guarantee to remain in full force and effect in the event of the transfer or assignment of the interest or rights of either party under said contract. (Signed) Jack Conway. Witness: C. B. Flowers; Dated: August 29th, 1929.”

The court found that the two corporations changed the contract in material respects, as we have stated; that there were delivered altogether 849 cabinets of the type specified in the contract at a total price of $12,310.10; that Monarch gave its trade acceptances in the sum of $7,250, which were negotiated by Lloyd and are not sued on here. Delivery was • tendered of an additional 151 cabinets of this type and was refused; 250 of a different type which the parties had agreed upon were ordered and partly constructed. Other facts were found to the effect that Lloyd was damaged in certain amounts by reason of certain work and material which had gone into the partial construction of cabinets under the mentioned orders and for the loss of certain profits which would have been earned had the contract been performed by the acceptance of the cabinets.