A written agreement between a company making sewing machines and
a consignee to receive and sell them on commission provided that
the commission should be calculated on the retail prices for which
the machines should be sold, as reported by the consignee, and that
attachments should be sold to the consignee at the lowest wholesale
rates. The proceeds of sales of machines, beyond the commission,
belonged to the company. In a suit by it against the consignee and
a person liable with him, on a bond for his indebtedness, to
recover such proceeds and the sale price of attachments, the
complaint set forth schedules showing the retail price of each
machine sold, as so reported, and the excess of money, beyond
commission, retained
Page 112 U. S. 677
by the consignee, and the price of each attachment sold to the
consignee.
Held that the complaint was sufficient.
The consignee and another person united in a bond to the company
conditioned that the former should pap to it all moneys which
should become due under or arise from the written agreement, and
waiving notice of nonpayment.
Held that the liability of
the surety arose on the bond, and that of the consignee on the bond
or the written agreement, and that the statute of limitations in
regard to written instruments governed the case.
The condition of the bond extended to the payment of notes made
or endorsed by the consignee and transferred to the company.
So far as the surety was concerned, his waiver or notice applied
to a default by the consignee.
The facts are stated in the opinion of the Court.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
This suit was brought in the District Court of the Third
Judicial District of the Territory of Utah, on the 13th of June,
1879, by the Victor Sewing Machine Company, against two persons
named Crockwell and Bassett, and two others named Streeper and
Murphy. On the 28th of June, 1875, the company, of one part, and
Crockwell & Bassett, of the other, entered into a written
agreement, whereby the former was: (1) to deliver sewing machines
to the latter, as consignees at Chicago, on their order; (2) the
latter to sell them in Utah territory, and, if possible, for cash;
all promissory notes taken to be guaranteed by the latter and
delivered to the former; endorsement of the notes by the latter
before such delivery to be such guarantee; all notes taken to be
payable to the order of the former, not more than 12 months from
date of sale; (3) the latter to sell all consigned machines and
remit for them within four months from date of shipment; on failure
to sell and remit, the former, after the four months, to be at
liberty to charge the latter with all machines consigned four
months, and not settled for at their retail price, less forty
percent, and such amounts to be immediately due on demand; (4) the
latter to
Page 112 U. S. 678
report every week machines on hand, and those sold, with terms
of sale, and remit the proceeds of sale; (5) on report, and
remittance, and approval, the former to credit the latter as
follows: on a cash remittance of one-half of the retail price of
machines sold, fifty percent of their retail price; on sales for
notes running not more than six months from sale, forty-five
percent of such retail price; on sales for notes running more than
six and not more than nine months from sale, forty percent of such
retail price; on sales for notes running more than nine and not
more than twelve months from sale, thirty-five percent of such
retail price; the latter to be charged with the difference between
the amounts remitted and the retail prices reported, and to remit
such an amount as will equal the retail price of the machine
reported sold (less said commissions), with five percent of the
retail price of machines sold for notes, such five percent to
remain with the former till the termination of the contract, and
the payment of all notes taken under it, and, after deducting
therefrom the cost of collecting the notes, and expenses of
settling the contract, the former to pay to the latter such part of
the 5 percent as should be due to them; (6) the former to sell
parts of their machines at forty percent discount from list prices,
and attachments at the lowest wholesale rates, both to be settled
for with cash every thirty days, unless time should be agreed for,
when twenty percent should be added to regular cash prices; (7) The
former to be at liberty to terminate the contract, and retake their
property at any time, charging the latter for loss of or damage to
machines; the latter to have the right to take the machines at the
retail price, as if new, less forty percent; the latter to be sole
agents for certain counties in Utah while satisfactorily performing
the contract; (8) the latter to pay a monthly rent for each wagon
furnished by the former; the former to have the right to make, on
notice, certain variations in the time of the notes; the latter to
be at liberty, for such machines as they shall dispose of during
each month, otherwise than for cash or note, to give their personal
notes, on an average of six months' time at the retail price of the
machines, less forty percent, or their personal notes on an average
of nine months' time at the retail
Page 112 U. S. 679
price of the machines, less thirty-five percent, the former to
have the right to terminate and renew this last provision at their
election.
On the 3d of July, 1875, the four defendants executed, on the
back of said agreement, a joint and several bond, under seal, to
the plaintiff, in the penalty of $3,000, with the following
condition:
"The condition of this obligation is such that if the above
bounden George Wallace Crockwell and Charles Henry Bassett, Jr.,
shall pay unto said Victor Sewing Machine Company all moneys due,
or which shall become due to said Victor Sewing Machine Company,
under or pursuant to the within contract, or which shall arise
therefrom, whether by book accounts, notes, renewals or extensions
of notes, or accounts, acceptances, endorsements, or otherwise,
hereby waiving presentment for payment, notice of nonpayment,
protest or notice of protest, and diligence, upon all notes now or
hereafter executed, endorsed, transferred, guaranteed, assigned,
and shall well and truly keep and perform, in all respects,
according to its true intent and meaning, the contract or agreement
to which this obligation is attached, executed between the said
Victor Sewing Machine Company and G. W. Crockwell and C. H.
Bassett, Jr., dated at Salt Lake City, the 28th day of June, 1875,
then this obligation to be void; otherwise, to remain in full force
and virtue. But said contract may be varied or modified by the
mutual agreement of said Sewing Machine Company and said G. W.
Crockwell and C. H. Bassett, Jr., as to the manner of carrying on
said business, or as to the time on which notes taken shall be
drawn, or as to the compensation to be paid to said G. W. Crockwell
and C. H. Bassett, Jr., or as to the period at which said G. W.
Crockwell and C. H. Bassett, Jr., shall report to said company for
the machines they may sell, or as to the territory on which said
machines shall be shipped or sold, or as to the place from which
said machines shall be shipped, and such changes and modifications,
or variations, shall in nowise affect or impair our liability on
this bond."
This suit is brought to recover the amount of the penalty of the
bond. The complaint sets forth
in haec verba the
agreement
Page 112 U. S. 680
and the bond and alleges that the defendants failed to perform
the condition of the bond that Crockwell & Bassett should
perform the agreement, in that (after reciting the provisions of
clauses four and five of the agreement), between July 3, 1875, and
February 10, 1876, the plaintiff at the request of Crockwell &
Bassett, consigned to them under the agreement divers sewing
machines which they sold before 1878, but they did not remit the
proceeds, or the part to which the plaintiff was entitled, to the
amount of $146.82,
"a detailed and itemized account of which said sales, showing
the machines received from plaintiff and sold by said Crockwell
& Bassett, and the amounts remitted, with the proper credits
thereon, and the amounts due and not remitted, as well as the
balance thereon now due plaintiff, is hereto attached marked
Exhibit A, and made a part of this complaint."
Exhibit A is a commission account, Crockwell & Bassett with
the company, containing sales reported with prices, and notes
received with dates, times, and amounts, and in which Crockwell
& Bassett are debited with moneys retained by them, and rent of
wagon, and collection charges, and a machine consigned over four
months, and commission before allowed and now charged back on a
machine returned, and are credited with their commissions, and the
amounts of the notes taken for the returned machine, showing a
balance of $146.82 due to the plaintiff.
The complaint further alleges that the defendants failed to
perform the condition of the bond that Crockwell & Bassett
should pay to the plaintiff all moneys due or to become due to it
under the agreement, and should perform the agreement, in that the
plaintiff, between July 3, 1875, and February, 1876, under clause 6
of the agreement at the request of Crockwell & Bassett,
consigned to them parts of machines at forty percent discount from
list prices, and attachments at the lowest wholesale rates, to be
settled for in cash by them every thirty days, unless time was
agreed for, when twenty percent was to be added to regular cash
prices; but Crockwell & Bassett did not settle therefor with
cash in thirty days, and had not paid therefor; that the money
which, by clause 6, they were required to pay to the plaintiff,
amounted to $87.97;
Page 112 U. S. 681
and that
"a detailed and itemized account, showing the parts of machines
and attachments so furnished Crockwell & Bassett, and the
amounts paid plaintiff therefor, and showing the amounts which
should have been, but were not, paid plaintiff by defendants
Crockwell & Bassett, with the balance now due plaintiff by
Crockwell & Bassett, is hereto attached, marked 'Exhibit B,'
and made a part of this complaint."
Exhibit B is an attachment account, by items, debiting Crockwell
& Bassett with articles furnished, and giving them credits,
resulting in a balance of $87.97 due the plaintiff.
The complaint further alleges that the defendants failed to
perform the condition of the bond that Crockwell & Bassett
should pay to the plaintiff all moneys due, or which should become
due, to it, under the agreement, or which should arise therefrom,
and should perform the agreement, in that the plaintiff, between
July 3, 1875, and February, 1876, under the agreement and bond at
the request of Crockwell & Bassett, consigned to them sewing
machines, which they sold after July 3, 1875, and before April,
1876; that, under the bond and clause 8 of the agreement, Crockwell
& Bassett, between the dates named, gave to the plaintiff their
personal promissory notes for the price of the machines, and at the
rates for the machines, mentioned in the agreement, and that "a
list and description of said notes is herewith filed, marked
"Exhibit C," and made a part of this complaint." Exhibit C shows
the date of each note, the time of its maturity, that all the notes
were made by Crockwell & Bassett, and payable to the plaintiff,
and the amount of each note, or the balance due thereon, exclusive
of interest. The complaint alleges that the whole amount of them is
$1,766.10, to which is to be added $609.93, for interest on them,
and $237.60, for attorney's fees for collection, making in all,
$2,613.63, and that Crockwell & Bassett have failed to pay that
sum, and owe it to the plaintiff.
The complaint further alleges that the defendants failed to
perform the condition of the bond that Crockwell & Bassett
should pay to the plaintiff all moneys due, or which should become
due, to it, under the agreement, or which should arise
Page 112 U. S. 682
therefrom, and should perform the agreement in this, that,
between July 3, 1875, and February 10, 1876, the plaintiff, under
the bond and agreement and at the request of Crockwell &
Bassett, consigned to them sewing machines which, prior to the last
date, they sold, and took therefor the promissory notes of the
vendees, payable to the order of the plaintiff, which notes
Crockwell & Bassett endorsed and guaranteed, and delivered to
the plaintiff, this being done under clause 2 of the agreement, and
that "a list and description of said promissory notes is herewith
filed, marked
Exhibit D' and made a part of this complaint."
Exhibit D shows the date of each note, the time of its maturity,
and its amount. The complaint alleges that the principal of the
notes amounts to $358.83, and that neither their makers nor
Crockwell & Bassett have paid them, but owe them to the
plaintiff.
It thus appears that the suit covers four claims: (1) proceeds
of sales of machines; (2) purchase price of attachments; (3)
personal notes for machines consigned; (4) guaranteed notes for
machines consigned.
Murphy and Streeper answered denying specifically the breaches
alleged; setting up that all the items in Exhibits A and B accrued
more than two years before the suit was commenced, and it was not
commenced within the time prescribed by the laws of Utah territory;
claiming a further credit of $203 on Exhibit A; denying that the
nonpayment of the notes covered by Exhibit C or by Exhibit D was a
breach of the condition of the bond, and alleging that Crockwell
& Bassett had no notice of the nonpayment of the notes covered
by Exhibit D. The answer further sets up that in March, 1876, the
plaintiff, by its agent, applied to Murphy to become surety on a
second bond, on a new contract with Crockwell & Bassett, and
that a settlement, amounting to an accord and satisfaction, was had
between the plaintiff and Crockwell & Bassett, as to the
matters covered by the complaint, and its agent informed Streeper
and Murphy thereof, and that the existing bond was discharged, and
Murphy signed the second bond on that assurance, Crockwell &
Bassett being then able to indemnify Streeper and Murphy
Page 112 U. S. 683
against liability on the first bond, and having since become
insolvent. Crockwell & Bassett also answered.
The cause was referred to a referee to "hear, determine, and
report a judgment." He reported findings of fact and conclusions of
law. He reported the facts to be as alleged in the complaint, as to
the items of Exhibits A, B, C, and D, with a credit on Exhibit A of
$31.22, and that there was due from Crockwell & Bassett, on
Exhibit C at least $2,750, exclusive of allowance for attorney's
fees, and on Exhibit D over $450, and due and unpaid from Crockwell
& Bassett to the plaintiff, on account of the several matters
set forth in the complaint, more than $3,000; that the Exhibits
fully credited all sums remitted by Crockwell & Bassett, and
that there was no settlement or accounting between Crockwell &
Bassett and the plaintiff, and no adjustment of their indebtedness
to it, and no agreement or accord or satisfaction made in regard to
such indebtedness. The report then proceeded:
"8th. In March, 1876, a new contract for the sale of machines
was made between the plaintiff and said Crockwell & Bassett,
and a new bond given by the latter, upon which the defendant Edmund
H. Murphy became a surety. Pending the negotiations for such new
contract, and before said Murphy became surety on the new bond, he
inquired of George Wilkinson, who was the agent of the plaintiff,
to negotiate the new agreement, in regard to the past business and
the object of the new bond, and said Wilkinson informed him in
substance that said Crockwell & Bassett had done well; that the
business was satisfactory to the plaintiff, and the plaintiff was
about to give them a new contract under which they would get a
larger percent and have a better opportunity to make money. No
other or further representations were made to said defendant Murphy
prior to the execution by him of the new bond, and said
representations were not false. At that time, no settlement had
been made of the accounts, but from casually looking over the
accounts it appeared that Crockwell & Bassett had, in the shape
of notes and leases, far in excess of what they owed, and, had the
notes turned over to the plaintiff, and the notes and leases held
by them, been good and collectible, the same would have far
exceeded their liabilities. At that
Page 112 U. S. 684
time, but a small portion of the indebtedness of Crockwell &
Bassett to plaintiff was due, and it was not known but that the
notes and leases taken by Crockwell & Bassett were generally
good and collectible."
"9th. About November, 1876, when the business of plaintiff was
taken from Crockwell & Bassett, and turned over to another
party, the said defendant Edmund H. Murphy, in the presence of
defendant Crockwell and others, inquired of said Wilkinson, who was
plaintiff's agent to turn over said business, in regard to the
condition of the business of Crockwell & Bassett, when the
following conversation occurred between said Murphy and
Wilkinson:"
" Question. Mr. Murphy: So far as the bondsmen are concerned,
how did they stand?"
" Answer. Mr. Wilkinson: So far as the boys (Crockwell &
Bassett) have acted, they could not do better. Everything is
satisfactory, and the business has been turned over to another
party, and everything is agreeable."
" Q. If that is the case, the bondsmen have nothing further to
bother about?"
" A. No; everything is satisfactory, and the business has been
turned over."
"This is the substance of representations made at that time, and
I find that said defendant Murphy got the impression that he was
released on the bonds."
"10th. About the 28th of March, 1876, and during the negotiation
for the new contract and bond, Crockwell & Bassett, desiring to
obtain the defendant Streeper as surety on the new bond, called him
into their office, and, in the presence of said Wilkinson and
during a conversation there, Charles H. Bassett informed said
Streeper he had nothing to fear, and then Streeper asked Wilkinson
if he was released or relieved on the first bond, and Wilkinson
informed him he had nothing to fear on that, and made an
affirmation which induced Streeper to believe he was no longer
liable. Streeper did not execute the new bond."
"11th. There is no evidence to show that any change has occurred
in the financial condition of Crockwell & Bassett since the
spring of 1876, and I find that no such change has occurred."
"12th. At the time of the commencement of this action, none of
the notes guaranteed by Crockwell & Bassett, as aforesaid, had
been due four years, and there is no evidence of any change in the
financial condition of the
Page 112 U. S. 685
makers."
"13th. George Wilkinson had no authority from plaintiff to bind
the plaintiff by any declaration as to the release of the said
bonds, or either of them, and I find he did not intend to make any
statement concerning the release which was untrue, or to deceive or
mislead the defendants, or any of them, and his statements were
rather in the nature of assent to, or nondenial of, statements made
by Crockwell & Bassett in his presence. I do not find he had or
exercised any such apparent authority as should induce the
defendants to rely on his statements concerning the business of
Crockwell & Bassett, or the satisfaction of said bonds, without
further inquiry."
The referee found the following conclusions of law:
"1. The nonpayment of the several sums found due and unpaid from
Crockwell & Bassett to the plaintiff, as in the findings of
fact specified, constitute breaches of said bond, and for which
breaches the sureties, as well as the principals, are liable."
"2. The action on the bond at the time of the commencement
thereof, was not barred by the statute of limitations in respect to
any of said breaches."
"3. The plaintiff is not estopped, nor its action barred or
affected, against any of the debts, by reason of any
representations made to the defendant Murphy or Streeper prior to
or since the execution of the second bond referred to in the
answer, nor was the execution of the second bond by the sureties
procured by fraud."
"4. The plaintiff is entitled to judgment that it have and
recover of and from the defendants the sum of three thousand
dollars, and the costs of this action to be taxed."
Streeper and Murphy filed exceptions to the findings of fact,
after the seventh, and to all the conclusions of law. Judgment was
entered for $3,000 and costs against all the defendants. Streeper
and Murphy appealed to the supreme court of the territory, which
affirmed the judgment. Murphy having afterwards died, his
administratrix and Streeper appealed to this Court.
See 2
Utah 557, 1 P. 470.
Page 112 U. S. 686
It is assigned for error that the complaint is insufficient to
support the judgment because the first two causes of action, those
relating to Exhibits A and B, do not allege the value of the goods
consigned either by the article or in the aggregate. The objection
made is that although the agreement states the shares to which the
plaintiff and the consignees are to be respectively entitled, it
fixes no price on the machines. The answer to this is that the
agreement states that the retail prices for which the machines
consigned are sold, as reported by the consignees, are the prices
on which the commissions of the consignees are to be calculated,
and that the agreement fixes the prices of parts of machines at
forty percent discount from list prices, and the prices of
attachments at the lowest wholesale rates. By the agreement, when
the fixed commissions are deducted from the retail prices of sales,
the rest belongs to the plaintiff, and Exhibit A shows the retail
price of each machine sold, as reported by the consignees, and how
much they retained beyond what they were entitled to retain as
commissions, and Exhibit B shows the price of each attachment sold
to the consignees. The Exhibits, in connection with the complaint,
make the matter definite.
It is also contended as to the first two causes of action that
the liability of the defendants arose on the sales of goods to the
consignees, and that the two years' limitation applies to those
causes of action. Murphy and Streeper were not parties to the
agreement. Their liability arose on the bond exclusively. All the
defendants were parties to the bond. This is a suit on the bond,
and what are called by the defendants causes of action are only
breaches of the condition of the bond. As the agreement was
executory, it was necessary to set out consignments and sales, and
resulting amounts due, to establish breaches. Even as regards the
consignees, an action against them, if not on the bond, would be on
the written agreement. The condition of the bond is that the
consignees shall pay all moneys which shall become due "under or
pursuant to the within contract, or which shall arise therefrom,
whether by book accounts, notes, renewals, or extensions of notes
or accounts." We are of opinion that, this suit being on a written
instrument,
Page 112 U. S. 687
the limitation was four years, and the action was not
barred.
It is also urged that Streeper and Murphy are not bound for the
payment of the notes made or guaranteed by the consignees, and that
their obligation was discharged when those notes were made or
guaranteed. But it appears clear to us that the condition of the
bond is that the consignees shall pay all money which shall become
due by their notes or their endorsements, or otherwise (the
agreement making the endorsement a guarantee of payment). Language
could hardly be stronger or more full.
Dixon v. Holdroyd,
7 El. & Bl. 903.
It is also urged that the facts found constitute an estoppel as
to Murphy and Streeper. The findings of fact negative the
allegations of the answer setting up this defense. What occurred in
November, 1876, is outside of any issue raised by the answer.
A point is made that the complaint does not aver that Murphy and
Streeper had notice of the default of the consignees; that no
notice is shown, and that the bond contains no waiver of such
notice. Assuming that the point may now be taken, the findings are
silent as to notice, but they show there was no prejudice for want
of notice. Moreover, the condition of the bond is absolute that the
consignees shall pay all moneys which shall become due to the
plaintiff under the agreement, the obligors waiving notice of
nonpayment on all notes executed, endorsed, or guaranteed. As
Murphy and Streeper did not make or endorse the notes, their waiver
could only apply to a default by the consignees.
We see no error in the record, and the judgment is
Affirmed.