Victor Sewing Machine Co. v. Scheffler

California Supreme Court Oct 10, 1882 No. No. 7,051Published

Before: McKinstry

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Holding. The court held that the surety was released from liability because the underlying contract was materially modified without the surety's consent in a manner not authorized by the bond, and the plaintiff failed to prove the breach of the original contract as alleged.

Issues

Whether a material modification of the underlying contract without the surety's consent released the surety from liability under the bond.
Whether the plaintiff could recover on a complaint alleging breach of an original contract when the evidence showed that contract had been superseded by a modified agreement.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The change by which Lonsdale was to have more than six machines, was not authorized by the clause permitting a change “ as to the manner of carrying on said business,” and it is not pretended that it is covered by any other of the changes”

“When plaintiff proved the important change in the contract between it and Lonsdale which released the sureties of the latter, it proved itself out of Court.”

“It necessarily follows that plaintiff can not recover damages for non-performance by Lonsdale of the conditions of the original agreement, upon which, and the non-performance by Lonsdale of the conditions of which, plaintiff alone counts”

Synopsis

Variance—Pleading—Contract Bond—Principal and Surety—Finding—Evidence.—L., as principal, and the defendant with one B., as sureties, executed a bond to the plaintiff to secure the performance of an agreement between the plaintiff and L. as its agent for the sale of sewing machines, consigned by the plaintiff to him. The agreement provided that L. should not at any one time have on consignment more than six machines. The bond provided that the agreement might be varied or modified, by the mutual agreement of the plaintiff and L., as to the manner of carrying on the business, or as to the compensation of L., or as to the period of which L.- shall report to and pay the plaintiff for the machines sold, or as to the territory on which the machines shall be shipped or sold, without affecting the liability of the obligors on the bond. The agreement was subsequently, without the consent of the defendant, changed, so as to permit the assignment to L. of more than six machines, and that he might have more than six at the same time.

Held: That the clause in the bond continuing the liability of the sureties, notwithstanding a change in the contract “as to the manner of carrying on the business,” did not authorize the change by which L. was to have more than six machines at the same time.

Finding.—The finding of the court below to the effect that after the execution of the contract and bond, transactions to a considerable amount took place .during a long period of time between L. and the plaintiff, resulting in a loss to the plaintiff, and that such transactions were more ex- ■ tensive, and involved greater liability, than those contemplated in the contract and bond, is a finding that an oral agreement, express or implied, had been substituted by the parties, or that the original had been materially altered with their consent. In the action upon the bond the plaint-tiff set forth breaches of the original agreement between it and L., but the evidence of the plaintiff showed that the agreement had been changed.

. Held: That the plaintiff showed that L. was not responsible for any breaches of the contract set forth in the complaint, by showing that such contract was not in force when he was alleged to have broken it. That the plaintiff could not recover in the action for the alleged breaches of the old agreement, because the evidence showed that a new agreement had been substituted for it. That the plaintiff could not recover in the action against the defendant for any breach of the new or substituted agreement, because the bond did not provide that the liability of the defendant should continue after the change made in the agreement. That having counted upon the non-performance by L. of the original contract, and proved that the same had been changed, so as to release the defendant, ihe plaintiff could not recover.

McKinstry, J.: The action was brought against defendant, as surety upon a bond executed by one Lonsdale, to secure the performance of an agreement between plaintiff and said Lonsdale, as plaintiff’s agent at Peoria, Illinois, for the sale of sewing machines. By the agreement, plaintiff was to ship to Chicago six of its sewing machines, marked to consignee at Peoria, and as often as an account of sales should be rendered by consignee to consignor, together with the full proceeds of said sales (except as otherwise provided), the consignor, plaintiff, on the request of consignee, to ship to his order as many machines as should be reported sold and accounted for; provided, however, that the consignee should never at any one time have on consignment more than six machines; that the consignee should open [533]a salesroom at Peoria and devote his time to the introduction of the “ Victor” machine; all machines to he sold for cash or promissory notes guaranteed by the consignee, etc.; that consignee should sell and account for all machines within four months from the date of shipment, and upon failure to sell and account to said consignor, the latter at its option, at any time after date of shipment, might charge the consignee with all machines consigned four months, not satisfactorily accounted for, at the retail price of said machines, less forty per cent., and such amounts should be immediately due on demand.

The bond sued on provides that the contract or agreement above in part recited, and therein described, “ may be varied or modified by the mutual agreement of said Sewing Machine Company and said Samuel G. Lonsdale, as to the manner of carrying on said business, or as to the compensation to be paid the said Samuel G. Lonsdale, or as to the period of which said Samuel G. Lonsdale shall report to and pay said Company for the machines he may sell, or as to the territory on which said machines shall be shipped or sold„and such changes and modifications or variations shall in nowise affect or impair our liability on this bond.”

A copy of the agreement between plaintiff and Lonsdale is annexed to the complaint, and the breaches of such agreement on the part of Lonsdale, as alleged; are: “ That on the thirty-first of March, 1877, the said Samuel G-Lonsdale was indebted to this plaintiff in the sum of two hundred and sixty-seven dollars for certain Victor Sewing Machines which had been from time to time consigned to said Samuel G. Lonsdale by said plaintiffs, under said contract, which had been consigned, as aforesaid, more than four months from the date of consignment, and had been sold by said Samuel G. Lonsdale, but had not been satisfactorily accounted for or paid for by him, and thereupon on said last mentioned day this plaintiff, under and by virtue of the provisions of said contract in that behalf, charged said Samuel G. Lonsdale with the retail price of said Victor Sewing Machines, less forty per cent., to wit, the sum of two hundred and sixty-seven dollars, aforesaid. And thereupon this plaintiff duly demanded payment of said sum, etc., which payment was refused.”

Victor Sewing Machine Co. v. Scheffler

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