M. Kanter Silk Corp. v. Cramer

STURTEVANT, J.

From a judgment in favor of the plaintiff the defendant L. H. Cramer has appealed. In its complaint the plaintiff pleaded a written guaranty and prayed for a judgment based thereon. On the calling of the case counsel made an opening statement. That statement and the reply thereto took the form of stipulations, from which it appeared that the plaintiff is a silk merchant. The defendant Cramer and one Goldstein owned two businesses—Varsity Frocks and Patsy Frocks. Both were incorporated and the stock was owned jointly by Cramer and Goldstein. Varsity Frocks was a manufacturing organization. Patsy Frocks was a retailing organization. The plaintiff had been selling goods to the Varsity Frocks. The latter manufactured the goods, and Patsy Frocks retailed them. Commencing in March, 1930, the plaintiff sold to Varsity Frocks Ltd. large quantities of drygoods. Each invoice had indorsed on it “terms”. Prior to the execution of the guaranty on some of the invoices the terms were 6 per cent in 60 days, some 7 per cent in 10 days, some 8 per cent in 10 days, etc. After the date of the guaranty the credit given was 6 per cent in 60 days. On February 31, 1930, there was a balance due and payable of $3,012.45. The larger part of that balance was long past due. On that date plaintiff prepared and the defendant signed an instrument in writing which, so far as material to this appeal, provided as follows: “For a valuable consideration, receipt whereof is hereby acknowledged and in further consideration of your extending credit to Varsity Frocks Ltd., Ninth and Broadway Bldg., Los Angeles, Cal. (hereinafter called the customer) the undersigned, Louis Cramer agrees to pay to you when due or at any time thereafter, any indebtedness contracted by the customer, that may exist at any time hereafter, or to be contracted for by said customer

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any amount not exceeding $5,000.00 (Five Thousand Dollars), if not paid promptly at maturity by said customer for purchases made from M. Kanter Silk Corporation, 819 Santee St., Los Angeles, Cal.” Thereafter the plaintiff sold the Varsity company other goods in the sum of $435.68'. It sued this defendant for the total, $3,448.14. The defendant paid $435.68 and contested his liability for the balance. Except as we have noted, no evidence was introduced showing the' circumstances under which the guaranty was made.

In several points the defendant contends that the contract by its terms imposes no liability for past indebtedness. It must be conceded that it is not expressly so limited. On December 31, 1930, when the guaranty was signed there was owing to the plaintiff $3,012.45. A large part was past due. As the evidence does not show to the contrary we must assume that after the guaranty was executed immediate payment was neither demanded nor threatened. Credit was extended thereon by the acts of the plaintiff until after the Varsity Frocks went into bankruptcy. In the meantime additional purchases were made. Terms no better than on previous purchases were given, and such terms, so far as the record discloses, were accepted without objection. These acts of the parties were some evidence of the contemporaneous construction by the parties and such construction is of weight in the interpretation of contracts.