1092 FURST & THOMAS V. MOSELEY. [169 FORST ' &. THOMAS V. MOSELEY. 'Opinion deliVered DeceMber 14, 1925. GEARANTY—FRAUDU EENT REPRESENTATION OF' DERTOII.-: —Where . h COII-) 'tract 'gdaranteed payment of the balnce of ' account for goods .previously purchased by the • debtor, misrepresentations of the debtor to :the guarantor , that there was no unpaid account do not bind the creditor nor release the guarantor, in the absence of knowledge or participation of the creditor in such misrepresentation. . . . • - • Appeal from White Circuit CoUrt; k. D. Robertson, \ Jüdge; rei r ersed. . * 'Avery M.'Blount, for appellant. • • o . lin B. Miller and Cul L. .Pearee, for ,appellee. • SMITH, J. . This suit ivas brought by appellants, Fi Urst & Thomas, against I. B. Chrisp, as'principal,' and
ARK.] FURST & THOMAS v. MOSELKi. 1693 Perrie Moseley, G. W. Skinner and T.' B. ,Scarbnrmigh, as sureties. No service was had uPon:' Chrisp, as he ha.d left the State, and no answers werb fired bY Skinner and Searborough, and judgments were rendered against theth by' defanit, but appellee Afeseley filed an answer ''and crosS-coMplaint. From these pleadings it ' appears , that , Chrisp had 'been engaged in the s'ale of 'merchandise furnished hiin by appellants; Furst & . Thornas .,-for that purpose,-and on Decembei 23, 192 : 2,, a written -contract was entered into' whereby Putst . & 'Thomas agreed 's ell Ohrisp : certain . goodS 'and anerthandise oh a: credit. On the 'sdnie day , Moseley; Skinner and . 8carborough executed:a Contract Of 'siiretyship' guaranteeing' the 'Payment of all kcidds sold and deliVered 'te Chrisp, including , hor balance due on his cOpttact: • The 'contract of suretyshiP was executed ,by'signing one of the printed lorths 'used by appellants . for, :this purpoSe, and ith proViSiOns are' as fo „ l lows : . "For : and in consideration of the:Payment 'of , $1, the receipt whereof is. hereby , acknowledged, and the, éx'tension 'of credit to, the above-named . merchant. hy Fur*t & Thomas, we, the undersigned, jointly 'and , severally guarantee to them.the faithful performance of the aboye.contract by him , and payment- for , goods furnished . to.him on credit, as therein provided, including, any balance on ,his , account for .goods previously purchased by him and remaining , unpaid at date of , its acceptance, .waiving acceptance of this guaranty and all notice, and-we.agree that the written acknowledgment of his. account 'by the . .said merchant shall bind us, and that any e3ttension.: of .time shall . not release us . frdm . liability thereon, and we further . agree that after three monthS from the teiMina-tion Of the above agreement by either-party and the Min-payment of his account by said 'Merchant, thiS.guaranty shallbecothe absolute as to the amount due froni him, arid upon demand we proniise tO pay the anaount due Furst &
1094 FURST & THOMAS V. MOSELEY. [169 Thomas without any proceeding being taken by them ; against , the said merchant. " (Guarantors sign here in ink) f 'Name . Occupation P. 0. Address ,Perrie ,1\foseley Farming Bald Knob George W..Skinner • Farmer Bald Knob T. B. Scarborough Farmer Bald Knob" . It was alleged in the complaint that Chrisp• was indebted to appellants; Furst & Thomas, in the sum of $1,123.93, and judgment therefor vms prayed. . In appellee's answer he denied .that he was, liable for any balance due by Chrisp for goods and merchandise furnished prior. to the execution of the contract set •out above, 'because that contract did not show on its ;face that Ohrisp was then indebted.to Nrst & Thomas, and • appellee was assured by Ohrisp that there was no outstanding indebtedness. Appellee relied upon this representatiOn 6f Chrisp and was induced to believe it because the contract did.not show any sum then claimed by Furst & Thomas.as due them. " pi:ieliee'adniltted that certain gooCls had been furnished Chrisp Since the execution 'of the 'bond, and he *offered to cOrifesS , jUdgment for the value thereof. Appellants demurred to so much of the ansWer as denied liabilityf or the goods furnished Chris') before the execUtion of the bond sUed on. This demurrer was Overruled, and plaintiffs stood on the deniurrer, wherenpon judgnient Was rendered against appellee for the amount. for Which appellee offered to confess judgment, and plaintiffs have appealed. The writing sued on appears to be an unambiguous • contract whereby the sureties agree, in consideration that goods be furniShed : their principal, to pay for such goods, together with any balance due for goods previously furnished,: and we : perceive no reason why the contract must ,not be:enforced aceording to its terms. In the case of People v. Lee, 104 N. Y. 441, the court of appeals of -that State said : "While the liability. of
FURST & THOMAS v. MOSELEY. 1095 guarantors is strictis'simi änd cannot be extended by 'constructión beyond the. plain and explicit .language of their contract, they are *still Subject to the rule that effea' lthiist be given to all of the lankuage of the coh-tract, and a Meaning and effect ascribed to 'eaCh of the words and phrases usekl therein, if it' 'can; be! 'done Without violating itS plain intent. The' general:'itile iS Undonbtedly that a contract cannot he construed to haVe a retroadtive operation, and that such an effeet 'can be given to it only where, by express words or' by neceSsary implieation,.it clearly appears tO be theintention of the parties tO embrace past transactionS, but,' When thik dOes appear; it is . UndisputablY cOmpeient for partieS td bind theMselves for sndh ; By the terps of the contract herosued on the Ourerties obligated themSelves to pay "the regular whOlesaie price for all goods sold to him , (Ohrisp) by then t i (Furst & Thomas), including any, balance on his .account ,for-goods previously purchased by him, and remainingimpaid at date of acceptance of this contract." There is no 61 , 1ega-tion that Furst & Thomas were Parties to or aware Of the alleged fraudulent representation of' Chrisp that he was not then indebted to Furst & Thomas. In the case of J. B..Watkins Medical Co. v. Mont-gomery, 140 Ark. 487, 215 S. W. 638, Warren, the surety on a contract which was similar to the one here sued on, defended on the .ground that he was induced to sign the contract by the frandUlent misrePreSentatiOn of Mont-gomery, the agent of the plaintiMmedical company. ; We said , this defense, if true, did not , aVail Warren,. it not being shown that the' Plaintiff:medical coinPany was aware of or a party to the misrepresentation. We, said that Montgomery was the principal in the contract of suretyship, and Warren was his sUrety i ‘ and that, regardless of the nature , of the contract betWeen' appellant and Montgomery, whether it was 'One creating the' relation of agencY between them as to their transactions or whether it was a contract for the sale and delivery tof, merchair-
dise i Montgomery was not . the agent of appellant in the procurement of sureties in the performance of , his contract with appellant. In procuring sureties Montgomery was necessarily acting for : himself and riot for appellant," So here chrfsp was not the, agent , Of the plain4ff's in securing sureties to the: guaraMy contract ; he ;was acting: for himself, and his .misrepresentations,in regard to his , existing liability could not hind the plaintiff§,i11, the absence of knowledge of or participatiOn in ;the Misrepresentations. Thp answer did not set mit any 'valid . defense; and the •demurrer . therefore should , have been sustained. Watkins Nedicine . Co. y. Ooomb,s, 166, : Vac. 1672 ;,ASlaginat;) Med. Co. v. BateY, 146 I\J., Cor-y. Hunt, 177 N. : W. 462; Furst & Thomas v. .Sandlin, 04 Son. 740, W atkins Medicie :Ca.' v. MCCall; 133 N W 066. These eases cite numerous others to the sanie 'effect, the' de6ision 'in ail of thein beingin line with our oWn deciSiOn in the''CaSe of J. k. Watkins Medical Ca. v. 'Mont OMery, supra, ' • The judgment of the conit ! below Will therefbre he' reliersed, arid th'catt§e"Will'be' remanded with direetiOns to sustain the deinurrer . to t the ,ariVer.`' J '
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.