Bass v. Service Supply Co., Inc.

Decision Date28 September 1988
Docket NumberNo. CA,CA
Citation25 Ark.App. 273,757 S.W.2d 189
PartiesDelbert L. BASS, Appellant, v. SERVICE SUPPLY COMPANY, INC., Appellee. 88-37.
CourtArkansas Court of Appeals

Kit Williams, Fayetteville, for appellant.

Charles E. Hanks, Charles E. Young, III, Fayetteville, for appellee.

MAYFIELD, Judge.

Delbert Bass appeals a judgment on a guaranty agreement for appellee, Service Supply Company, Inc. On appeal, appellant argues that the trial court's findings are clearly erroneous. We disagree and affirm.

Since approximately 1970, appellant and his wife, Mary Bass, were the sole shareholders of a corporation entitled Bass Plumbing, Heating & Cooling, Inc. Appellee later began selling materials to Bass Plumbing, Heating & Cooling on open account. After a period of time, in 1983, appellant signed a guaranty agreement for credit extended by appellee to Bass Plumbing, Heating & Cooling. This guaranty provided as follows:

I/WE HEREBY AUTHORIZE SERVICE SUPPLY COMPANY, INC. THE RIGHT TO RECEIVE ANY INFORMATION PERTAINING TO MY/OUR CREDIT WITH THE ABOVE REFERENCES, BANKS, OTHER CREDITORS OR CREDIT BUREAUS. GUARANTY IS GIVEN BY THE UNDERSIGNED TO SERVICE SUPPLY COMPANY, INC., HEREINAFTER CALLED THE COMPANY, IN ORDER TO INDUCE IT TO EXTEND CREDIT TO, OR OTHERWISE BECOME THE CREDITOR OF THE APPLICANT. I/WE HEREBY GUARANTEE TO THE COMPANY THE PROMPT PAYMENT, WHEN DUE, OF EVERY CLAIM OF THE COMPANY WHICH MAY HEREAFTER ARISE IN FAVOR OF THE COMPANY AGAINST THE APPLICANT. THIS IS A CONTINUING GUARANTY AND SHALL REMAIN IN FORCE UNTIL REVOKED BY ME/US BY NOTICE IN WRITING TO THE COMPANY, BUT SUCH REVOCATION SHALL BE EFFECTIVE ONLY AS TO CLAIMS OF THE COMPANY WHICH ARISE OUT OF TRANSACTIONS ENTERED INTO AFTER ITS RECEIPT OF SUCH NOTICE. THIS OBLIGATION SHALL COVER THE RENEWAL OF ANY CLAIMS GUARANTEED BY THIS INSTRUMENT OR EXTENSIONS OF TIME OF PAYMENT THEREOF, AND SHALL NOT BE AFFECTED BY ANY SURRENDER OR RELEASE BY THE COMPANY OF ANY OTHER SECURITY HELD BY IT FOR ANY CLAIM HEREBY GUARANTEED. I/WE CERTIFY THAT I/WE HAVE READ, UNDERSTAND, AND AGREE TO THE TERMS AND CONDITIONS ABOVE AND ON THE REVERSE SIDE OF THIS APPLICATION.

In signing the guaranty, appellant did not indicate his title or position with Bass Plumbing, Heating & Cooling. After the guaranty was signed, appellee continued to sell materials on open account to Bass Plumbing, Heating & Cooling. In 1986, Bass Plumbing, Heating & Cooling changed its name to Bass Mechanical Contractors, Inc. No other changes were made in the corporate structure, and notices were sent to the corporation's creditors informing them of the name change. Bass Mechanical Contractors continued to purchase materials on open account from appellee.

In 1987, appellee sued appellant as personal guarantor for the debts of Bass Mechanical Contractors in the amount of $19,398.61 and relied upon the guaranty executed by appellant in 1983. After trial, the circuit court found that there was proper consideration for appellant's guaranty because appellee promised to extend credit to the company although they were under no obligation to do so; that appellant signed the guaranty in his individual capacity; and that the name change of the corporation was not a material change and did not extend appellant's liability beyond the express limits or terms of the guaranty agreement. Judgment was entered for appellee in the amount of $18,010.98 plus interest and costs.

For his first point, appellant argues that the circuit court's finding that there was adequate consideration for the guaranty agreement is clearly erroneous and clearly against a preponderance of the evidence. The findings of fact of a circuit court sitting as a jury will not be reversed on appeal unless clearly against a preponderance of the evidence, and in making that determination, we give due regard to the superior opportunity of the trial court to judge the credibility of the witnesses and the weight to be given their testimony. Shelter Insurance Co. v. Hudson, 19 Ark.App. 296, 720 S.W.2d 326 (1986).

A guaranty is a collateral undertaking by one person to answer for the payment of a debt of another; for a guarantor to become liable under a guaranty of payment, there need only be a failure of the primary obligor to make payment. First American National Bank v. Coffey-Clifton, Inc., 276 Ark. 250, 633 S.W.2d 704 (1982). See Cleveland Chemical Co. of Arkansas, Inc. v. Keller, 19 Ark.App. 7, 716 S.W.2d 204 (1986). A guaranty contract may be supported by sufficient consideration so long as there is a benefit to a principal debtor or guarantor, or a detriment to the guarantee. Shamburger v. Union Bank of Benton, 8 Ark.App. 259, 650 S.W.2d 596 (1983). Consideration is any benefit conferred or agreed to be conferred upon a promisor to which he is not lawfully entitled, or any prejudice suffered or agreed to be suffered by a promisor other than such as he is lawfully bound to suffer. McIlroy Bank & Trust Co. v. Comstock, 13 Ark.App. 13, 678 S.W.2d 782 (1984).

Appellant argues that there was no consideration to support the...

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9 cases
  • Stacy v. Williams, CA
    • United States
    • Arkansas Court of Appeals
    • June 3, 1992
    ...of the trial court to judge the credibility of the witnesses and the weight to be given their testimony. Bass v. Service Supply Co., 25 Ark.App. 273, 276, 757 S.W.2d 189, 190 (1988); Ark.R.Civ.P. 52(a). We cannot say that the trial court's holding that appellees' ability to obtain financing......
  • Sims v. Moser
    • United States
    • Arkansas Supreme Court
    • May 22, 2008
    ...when the evidence shows that the name change did not alter the identity of the corporate entity. See, e.g., Bass v. Service Supply Co., 25 Ark.App. 273, 757 S.W.2d 189 (1988). In the instant case, there was a dispute over whether the various name changes of JMFH were also accompanied by cha......
  • Abbott Bldg. Corp., Inc. v. U.S., 90-15688
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • August 22, 1991
    ...the authority is quite to the contrary. See, e.g., Alley v. Miramon, 614 F.2d 1372, 1384 (5th Cir.1980); Bass v. Service Supply Co., Inc., 25 Ark.App. 273, 757 S.W.2d 189, 191-92 (1988); Briere v. Barbera, 163 A.D.2d 659, 558 N.Y.S.2d 278, 279 (1990); First Am. Sav. Bank, F.S.B. v. Adams, 8......
  • U.S. v. Dawson
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • April 11, 1991
    ...Cf. First American Nat'l Bank v. Coffey-Clifton, 276 Ark. 250, 251-52, 633 S.W.2d 704, 705 (1982); Bass v. Service Supply Co., 25 Ark.App. 273, 275-76, 757 S.W.2d 189, 190 (1988). The Arkansas appellate courts have never confronted the issue of whether a secured party who fails to provide a......
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