Opinion
11429
February 28, 1924.
Before MEMMINGER, J., Barnwell, Spring Term, 1923. Reversed and remanded.
Action by A.F. Greene against Herman Brown and Isadore Brown, partners as Simon Brown's Sons. From a directed verdict for plaintiff, the defendants appeal.
Messrs. Brown Bush, for appellants, cite: Notice of acceptance of guaranty not necessary: 69 S.E., 227; 12 R.C.L., 1071; 2 S.C. 417. Mr. G.M. Greene, for respondent, cites: Notice of acceptance of guaranty necessary: 13 S.C. 94.
February 28, 1924. The opinion of the Court was delivered by
In action of claim and delivery the plaintiff, Greene, claimed the property in question by virtue of a chattel mortgage and rent lien given by one General Ray. The defendants alleged that possession of the property had been acquired by them under a chattel mortgage given by Ray to secure an indebtedness to them, the payment of which indebtedness had been guaranteed in writing by the plaintiff, Greene. Upon the basis of said written guaranty, the defendants set up a counterclaim against plaintiff for an amount considerably in excess of the alleged value of the property involved. The appeal raises the one question of whether the Circuit Judge committed error in directing a verdict for the plaintiff.
The essential evidentiary facts upon which that question turns are these: The plaintiff, Greene, a resident of Augusta, Ga., owned a plantation near Williston in Barnwell County. General Ray was a negro tenant on his Williston farm. The defendants, Brown's Sons, were supply merchants at Blackville. In the early part of 1920 Ray was indebted to the defendants in the sum of $1,943, secured by a mortgage of "three head of stock," a wagon, etc. Ray sought to obtain advances from defendants for 1920, but was told by them that they would not run him, "unless he would get Mr. Greene to take up his indebtedness." After two or three conferences between Ray and defendants, defendants finally told Ray they "would take $1,650 for the debt." Ray then went to see his landlord, Greene, to whom he had agreed to pay as rental for the year 1920 eight bales of cotton. He told Mr. Greene that the defendants were pressing him and talking of taking his stock. Thereupon Greene wrote the following letter, and "gave it to Ray to carry to" the defendants:
"March 3, 1920. "Simon Brown's Sons, "Blackville, S.C.
"Dear Sirs:
"General Ray informs me that he is due you about $1,650 secured by bill of sale of two mules, one horse and one wagon and one buggy. As Ray rents from me I am writing you to say that if you will let Ray continue with his stock and chattels to make his crop I will take up his papers in full this fall for him, unless and if we should have an extremely bad year worse than we can think of now on account of the boll weevil. I will agree to pay 50 per cent. of his indebtedness anyway.
"Yours truly, "A.F. GREENE."
Ray brought this letter to the defendants, who, "in consequence of getting" it, agreed to carry Ray over until fall; took another paper, dated March 6, and recorded March 8, 1920, in which was included the old indebtedness and an additional $1,000 to be advanced secured by mortgage of crop and stock, etc.; and thereupon shipped Ray fertilizer to Williston, and advanced him supplies, etc. No formal or express notice of the acceptance of the offer contained in plaintiff's letter was communicated to the plaintiff.
The direction of a verdict for the plaintiff was predicated upon the view (1) that the plaintiff, Greene, was not bound by the offer set out in his letter in the absence of notice to him of its acceptance by the defendants, and (2) that there was no evidence of such notice of acceptance.
In the conclusion of the learned Circuit Judge that the plaintiff's proposal in writing to pay the debt of Ray was an offer or promise which required notice of its acceptance in order to ripen into a completed agreement we concur. The letter may not properly be construed as an unconditional proposal to guarantee the payment of Ray's existing indebtedness to the defendant in a certain amount. Hence the rule that no notice of acceptance is required, where the proposal is to guarantee the payment of an existing debt of another in a definite amount known to the guarantor at the time, is inapplicable. Nor does the case fall within the exception to the general rule that notice of acceptance is not required, where the proposal or promise of the guarantor is in response to and made in compliance with the request from the guarantee. See Mott Iron Works v. Clark, 87 S.C. 199; 69 S.E., 227. The plaintiff's offer to defendants to pay 50 per cent. of Ray's indebtedness of $1,650, "anyway," was, we think, clearly subject to the condition that the defendants would "let Ray continue with his stock and chattels to make his crop." It was not in compliance with defendants' proposal or request in the premises, which was that the plaintiff, Greene, would "take up" Ray's indebtedness, but was in the nature of a counter proposition. Clearly, therefore, notice of acceptance of the plaintiff's proposal was necessary in order to effect a meeting of the minds of the parties and to complete the contract of guaranty. Duncan Shumate v. Heller, 13 S.C. 94; 12 R.C.L., 1067, 1068, Pars. 17, 18; note collating decisions 16 L.R.A. (N.S.), at page 367.
But we find ourselves unable to concur in the second conclusion of the trial Judge that the evidence was not reasonably susceptible of the inference of fact that the plaintiff had due and sufficient notice of the acceptance of his offer. In those cases in which notice of the acceptance of a guaranty is required it is not necessary that the guarantor be given direct, actual, and personal notice by the guarantee or his agent but such notice may be implied from the circumstances of the particular transaction. Note 5, 16 L.R.A. (N.S.), 377; 12 R.C.L., 1071, Par. 21. In the case of Griffin v. Rembert, 2 S.C. 410, referring to notice of the acceptance of a guaranty, this Court said:
"The notice of assent need not be express. It may be implied from the circumstances of the particular transaction. * * * No precise rule can be laid down as to the time when notice should be given of the acceptance of a guaranty which is to be prospective in its operation, or in what manner it should be given. Even without direct information from the person to whom the guaranty is addressed, circumstances might show that the guarantor was fully advised of its acceptance; and, in such a case, the end to be obtained by express notice would be fulfilled."
In the case of Lawton v. Maner, 9 Rich.; at page 339, where a nonsuit was ordered on circuit upon the ground that the guarantor had not received notice of the acceptance of his guaranty, the Court said:
"Looking to the whole transaction, as well the circumstances already enumerated, as those additional to be found in the relation in which Baker and Maner stood to each other, their residence in the same neighborhood, the letter of the executors, though not amounting to a waiver of proof, yet clearly disclosing the fact that they, too, had at least some knowledge of the transaction, and felt no surprise that the estate, with which they were intrusted, was looked to, such a train of circumstances might well presuppose privity and knowledge on the part of the guarantor that credit had been obtained on the faith of his guaranty. These are matters very proper for the consideration of a jury, and, in the opinion of this Court, might well have justified a finding of that fact favorable to the plaintiffs."
In the case at bar notice of the acceptance of plaintiff's offer was promptly communicated to plaintiff's tenant, Ray; the acceptance of the offer made under date of March 3 was acted upon on March 6 by the taking out of a new paper, whereby the defendants, in effect, bound themselves to "let Ray continue with his stock and chattels to make his crop" in compliance with plaintiff's stipulation; the new paper was spread upon the public records on March 8; the plaintiff's contract with Ray for the payment of eight bales of cotton as rental for his place was vitally dependent for its fulfillment upon Ray's ability to hold his stock and make a crop; the time of the year admitted of no substantial delay on the plaintiff's part in ascertaining whether his tenant would be able to carry on; the defendants followed up their acceptance by furnishing Ray with fertilizer and supplies for farming operations on plaintiff's land. The facts, we think, were amply sufficient to put the plaintiff upon inquiry and to support an inference that he acquired knowledge of the acceptance of his offer of guaranty within a reasonable time after it was made.
While the facts of the case of Duncan Shumate v. Heller, supra, relied upon by the Circuit Judge to support a contrary conclusion, bear a somewhat close analogy to the facts of the case at bar up to a certain point, the relation of the parties here, the nature of the debt guaranteed, and the scope and character of the transactions out of which the proposal of guaranty arose, as indicated by the facts above outlined, are materially different from those involved in Duncan, etc., v. Heller. In that case the contention that notice of acceptance need not be express or specific does not seem to have been made; but, if the point had been raised, we think the facts were not so essentially similar or analogous as to require that this case should be ruled by that decision.
We are of the opinion that the evidence made an issue of fact as to notice of acceptance which should have been submitted to the jury. The judgment of the Circuit Court is accordingly reversed, and a new trial granted.
MESSRS. JUSTICES WATTS, FRASER, and COTHRAN concur.