R. N. Nason & Co. v. Kennedy

SHAW, J.

Plaintiff appeals from a judgment entered in favor of defendant in an action brought to recover upon a written guaranty executed by defendant, as follows:

“July 24, 1914.

“R N. Nason & Co.,

“San Francisco, California.

*

‘ Gentlemen:

“I do hereby guarantee the account of L. C. Kennedy up to the sum of seven hundred fifty ($750.00) dollars, for what goods in your line he may purchase from you, and it'is understood that if he does not pay his bills under the terms of purchase that I will pay them or see that they are paid.

“Respectfully Yours,

“Mrs. Maria J. Kennedy.”

Appellant contends that this instrument constituted a continuing guaranty, as defined by section 2814 of the Civil Code, whereas respondent insists that, as found by the court, it should be construed as a guaranty for goods bought to the extent only of $750, which sum having been paid by L. C. Kennedy, the obligation of the guaranty was discharged.

[1]

While by this writing defendant guarantees the account of L. C. Kennedy and agrees that if he does not pay his bills she will pay them, nevertheless it is silent as to what particular account or bill it had reference to. There is nothing

[161]

contained therein disclosing with certainty • that the parties intended the guaranty should cover liability incurred in successive transactions covering an indefinite period of time. Hence, by reason of such uncertainty, we must, in determining the intention of the parties thereto, resort to the circumstances under which the instrument was executed.

(First Nat. Bank

v.

Bowers,

141 Cal. 253, [74 Pac. 856].) These circumstances, as disclosed by the evidence, are as follows: In July, 1914, defendant’s son, L. C. Kennedy, being desirous of engaging in the mercantile business, placed an initial order for a stock of goods with the Los Angeles agent of plaintiff, whose principal place of business was in San Francisco. Upon receiving this order plaintiff wrote to the agent from whom it had received the same, stating in substance that it could not make shipment of the goods unless payment thereof was guaranteed, and inclosed with its letter the form of guaranty, with the request that the agent get Kennedy to have his mother sign the same, and saying, “We understand she is responsible and thus we would be protected for this amount.” Plaintiff further stated in the letter: “Mr. Kennedy should be willing to take this guaranty because on the terms you are desirous of making to him, he should be in a position to take care of his indebtedness easily, but as a precaution and as a safeguard and on account of the conditions under which he is going into business and also on account of the present financial situation, we must insist upon a guaranty.” L. C. Kennedy, in substance, testified that plaintiff’s agent, Mr. Hambly, who was instructed to secure the guaranty, in requesting same told him that plaintiff thought his order too large and had reduced it to approximately $750, to the extent of which value they were willing to ship the goods in filling his order, if payment thereof was guaranteed by his mother; that there was no arrangement or understanding for the purchase of other goods from plaintiff than this initial order which the guaranty was intended to cover. Kennedy did from time to time, while conducting his business, buy other goods from plaintiff, the total amount of which was $1,881.02, upon which he paid all but a balance of $747.27, for which suit is brought.