QUAPAW PUMPING & ROYALTY CO. v. CAMBLIN

QUAPAW PUMPING & ROYALTY CO. v. CAMBLIN
1924 OK 1092
232 P. 84
106 Okla. 112
Case Number: 12905
Decided: 12/02/1924
Supreme Court of Oklahoma

QUAPAW PUMPING & ROYALTY CO.
v.
CAMBLIN et al.

Syllabus

¶0 1. Guaranty--Rights of Guarantor -- Discharge for Noncompliance With Terms.
The guarantor has a right to prescribe the exact terms upon which he will enter into the obligation and to insist upon his discharge if those terms are not observed. It is not a question whether he is harmed by a deviation to which he has not assented. He may plant himself on the technical obligation.
2. Same--Contract for Electric Service in Mine--Extent of Guaranty.
In this case, the plaintiff, Empire Engineering Service Company, entered into a contract with the Quapaw Pumping & Royalty Company on July 18, 1919, wherein the Empire Engineering Service Company agreed to install an electric motor in the mine of defendant, Quapaw Pumping & Royalty Company, and put it in running order for a consideration of $ 450 per month and 45c per h. p. after the first three months. Afterwards said motor got out of repair and Mr. Camblin, representing the Empire Engineering Service Company, made an examination of the motor in the mine and offered to put it in good running order within 48 hours, if the Quapaw Pumping & Royalty Company would guarantee the open account after May 15. This the Quapaw Pumping & Royalty Company agreed to do, and furnished a satisfactory guaranty contract guaranteeing the open account after May 15, 1920. There was nothing said in said guaranty contract about guaranteeing the running account for rent. Held, that the guarantors were not liable for the rental of said motor under their guaranty contract.
3. Same--"Open Account."
An open account is one in respect to which nothing has occurred to bind either party by its statements on an account which is yet fully opened to be disputed. Abbt. Law. Dic. The word "open" indicates that there is something undetermined by the contract of the parties, or by the application of settled rules of law, and an account cannot be said to be open when no term of the contract remains to be settled by agreement of the parties. Held, that the rental contract included in the original contract of July 18, 1919, specifically provided for the payment of rental, and that same was not included in the guaranty contract.
4. Contracts -- Recovery by Contractor for Unauthorized Expenses.
Where a contractor incurs expenses that are not authorized under his contract nor by the parties to be charged therewith, he is not entitled to recover for the same.

Clyde Morsey, for plaintiff in error.
Shannon & Shannon, for defendants in error.

MAXEY, C.

¶1 This is a suit on an account, which is set out in the record, and also the plaintiffs in error's brief. This is made an exhibit to the plaintiffs' petition, and shows a balance of $ 3,146.19. The original contract upon which this action is based was made the 18th day of July, 1919, between plaintiffs and defendant Quapaw Pumping & Royalty Company. This contract is set out in detail, as will appear by the statement of the opinion. The Quapaw Pumping & Royalty Company was operating what is known as the Brinson-Kirtley mine, and the contract is made in relation to that mine. They were having trouble with the motor which furnished the power for de-watering the mine, and Mr. Camblin, representing the Empire Engineering Service Company of Joplin, Mo., went to the mine and made an examination on or about May 15, 1920, and told them that he could repair the motor and have it in good running order inside of 48 hours, as he had the necessary repairs in his shop at Joplin, but he required as a condition precedent to working on the motor that the Quapaw Pumping & Royalty Company guarantee the open account from and after May 15, 1920. There had a considerable balance accumulated on the account prior to that date, but he only required the open account to be guaranteed from May 15 by the guaranty contract, which was drawn by Mr. Camblin of the Empire Engineering Service Company and signed by him for that company, and signed by C. H. Cleveland, D. C. DeVilliers, and W. I. Bingham. who were officers and stockholders in the Quapaw Pumping & Royalty Company, a corporation, as guarantors. This guaranty contract is set out in the foregoing statement, and it will be observed that this guaranty contract only guarantees the open account of any indebtedness contracted by the Quapaw Pumping & Royalty Company with the Empire Engineering Service Company from May 15, 1920, and does not relate to or guarantee any part of the account that was contracted prior to that date. The plaintiffs did not repair the motor and have it in working order within the time that they agreed, to wit, 48 hours. It seems that when they examined the supplies they had on hand, they did not have the coils necessary to repair this motor and had to make them or procure them from the factory, and it was two or three weeks before they repaired the motor, and then it did not work well, and after trying it for sometime they took it out and installed another motor, and that did not work well, and Mr. Camblin, representing the Empire Engineering Service Company, went over the situation and said they would have to put in a new motor of a different make, and asked Mr. Spafford, the superintendent of the Quapaw Pumping & Royalty Company, to give him an order to put in a new motor, or repair the one in the mine. Mr. Spafford said he did not have any authority to give orders, that they would have to get the order from the company. Camblin then asked Spafford if he would not make a suggestion to the company that they install a new motor, and after some talk Spafford agreed to do so, and wrote the following suggestion: "Would suggest that the Quapaw Pumping & Royalty Company put motor in as good condition as it was when last installed in the Kirtley shaft. G. O. Spafford." Camblin acted on this suggestion of Spafford and treated it as an order, notwithstanding the fact that Spafford had told him that he could not give an order, that he would have to get that from the company, and incurred an indebtedness of $ 772.57 in an effort to repair the motor already in the mine instead of putting in a new one and this item constitutes a part of the account sued on, and is contested on the ground that it was incurred without authority from the Quapaw Pumping & Royalty Company, and that they would not have incurred that expense if they had known it was being incurred. They seemed to have taken it as a part of the work that Camblin was to do to put the motor in good running order. Another item which is contested is the rental on the motor of $ 1,088.84. The guarantors contend that they did not guarantee the rental account as that was contracted under the original contract of July, 1919, and they contest the payment of this item. Another item which is contested is for $ 145 rental on a line panel. The Quapaw Pumping & Royalty Company contend that they never agreed to pay any line panel rent, and nothing was ever said to them about, any such rent, and for the first two or three months, there was no charge made for it, and it appears to have been put in there because Camblin took offense to some remark that was made by Mr. Chambers, who as Camblin said, tried to get smart, and he just thought he would tax them with rent on the line panels; and the Quapaw Pumping & Royalty Company contest the payment of this item. Another item which is contested by the guarantors is the amount of said account which accrued prior to May 15, 1920, and amounts to $ 978.03. In our judgment, while the Quapaw Pumping & Royalty Company is liable for this amount, the guarantors are not liable for any part of it, because they only guaranteed the open account from and after May 15, 1920. These four items are the principal items that are contested, and on the decision of these four items, the case will largely turn. There is one instruction requested by the defendant guarantors which was requested by them and refused by the court, which instruction reads as follows:

"The court instructs the jury that if you shall find and believe from the evidence in this cause that on or about May 18th, 1920, defendants, C. H. Cleveland, W. I. Bingham and D. C. DeVilliers, executed the guaranty contract introduced in evidence and that the consideration for the execution of said contract was the agreement and promise of plaintiff to render to defendant Quapaw Pumping & Royalty Company efficient engineering service and have the motor in the Brinson-Kirtley mine in working order within forty-eight hours from said May 18th, 1920, and if you shall further find and believe from the evidence that said plaintiff did not comply with said agreement and did not have said motor in operating order within said forty-eight hours from said date, then said defendants, C. H. Cleveland, W. L. Bingham and D. C. DeVilliers, are not liable to plaintiff on said contract of guaranty and your verdict will be for said defendants."

¶2 The defendants also saved exceptions to instructions No. 6 and No. 9 given by the court, which are as follows:

"You are instructed that the plaintiff seeks to recover a judgment against C. H. Cleveland, D. C. DeVilliers and W. I. Bingham, as guarantors, of all indebtedness created in their favor by the defendant Quapaw Pumping & Royalty Company after May 15th, 1920, and that said individual defendants contend there is a failure of consideration for their contract of guaranty by reason of which they are released therefrom; and if you find and believe from the evidence in this case that the plaintiff guaranteed to the defendants that if said individuals would guarantee the payment of the indebtedness incurred by it subsequent to May 15th, 1920, and that they would furnish engineering service and have the defective motor in the Brinson-Kirtley mine in operation within 48 hours after such guaranty was furnished, and that the said guarantors relied upon such agreement and would not have incurred liability upon such contract of guaranty but for the making of such guaranty by the plaintiff, then the guarantors would be released from liability on said contract unless you find and believe from the evidence in the case that the plaintiff substantially complied with the terms of such agreement. Provided, that if you should find and believe from the evidence in this case that the plaintiff in making such agreement, if you find such agreement was made, relied upon the statements or representations of an agent or employe of the defendant Quapaw Pumping & Royalty Company as to the condition of the defective motor at the time of making of such agreement, and that such guarantors were advised of such fact, and you further believe that the condition of said motor at said time was not fairly and truthfully represented to the plaintiff, then the guarantors would not be released from liability upon the failure of the plaintiff to substantially perform the terms of the agreement with reference to the repair of such motor."

"You are instructed that under the evidence in this case there is no issue for your consideration as to the matter set up by the defendants concerning the right of the plaintiff to maintain this suit, nor to the question of damages by reason of the defendant being required to operate its pumps for two months longer than it says would have been required if a proper motor had been furnished by the plaintiff, and that as to the guarantors there is but the one question for you to consider and that is the question submitted under instruction No. 6."

¶3 We will now take up the four items, above set out, before passing on the instructions. We will first take up the part of the action that accrued prior to May 15. We do not think there is any question about the defendant guarantors not being liable for this account under the contract which was written by Mr. Camblin, representing the plaintiffs, for it does not mention rent but only refers to the open account after May 15, and Mr. Camblin's letter transmitting the guaranty contract to his company reads as follows: "We are enclosing herewith contract of guaranty covering all open accounts of the Quapaw Pumping & Royalty Company, dating after May 15, this year." This letter reflects what Mr. Camblin understood the guaranty contract covered. The obligation of the guarantors cannot be greater than that of the principal. Section 5136, Comp. Stat. 1921; Dunlap v. Stannard, 19 Okla. 232, 91 P. 845. "The guarantor has a right to prescribe the exact terms upon which he will enter into the obligation and to insist upon his discharge if those terms are not observed. It is not a question whether he is harmed by a deviation to which he has not assented. He may plant himself on the technical obligation." 12 R. C. L., page 1081. The guarantors' contract applies only to the open account. Open account is defined in volume 6, page 4985, of Words and Phrases, as follows:

"An open account is one in respect to which nothing has occurred to bind either party by its statements, or an account which is yet fully open to be disputed. Abb. Law Dic. The word 'open' indicates that there is something undetermined by the contract of the parties or by the application of settled rules of law, and an account cannot be said to be open when no term of the contract remains to be settled by agreement of the parties. McCamant v. Batsell, 59 Tex. 363-368."

¶4 In the case of Lamm v. Colcord, 22 Okla. 493-496, 98 P. 355, it is said:

"But when the meaning of the language in a contract of guaranty is ascertained and the actual operation under such construction has begun, the guarantor is entitled to the application of the strict rule of construction and cannot be held beyond the precise terms of such contract."