Beauchamp v. North American Sav. Ass'n
| Citation | 543 S.W.2d 536 |
| Decision Date | 01 November 1976 |
| Docket Number | No. KCD,KCD |
| Parties | Charles D. BEAUCHAMP and Lena Beauchamp, Plaintiffs-Appellants, v. NORTH AMERICAN SAVINGS ASSOCIATION, a corporation, Defendant-Respondent. 27664. |
| Court | Missouri Court of Appeals |
Dale, Flynn, Bauman & Liles, Martin M. Bauman, St. Joseph, for plaintiffs-appellants.
Slagle & Bernard, Warren E. Slagle, Kansas City, for defendant-respondent.
Before SHANGLER, P.J., and SWOFFORD and SOMERVILLE, JJ.
The plaintiffs Beauchamp sued to recover a $4500 savings account pledged as security for a loan to the Zieglers for the purchase of the Beauchamp premises. Thereafter, the Zieglers conveyed to the Costners who assumed the mortgage indebtedness. The plaintiffs Beauchamp now claim that the assumption by the Costners of the Ziegler mortgage indebtedness materially alters their undertaking as pro tanto guarantor of the loan, and by operation of principles of guaranty law, releases them from their guaranty obligation.
The cause was presented to the trial court for decision on stipulated facts. The issues were determined adversely to the plaintiffs Beauchamp and this appeal follows.
The defendant complains, at the outset, that points attempted by plaintiffs in their brief do not conform to the requirements of Rule 84.04(d) for concise statement of the claims of judicial error. It is indeed plain that the abstract statement of legal principles the plaintiffs offer resembles more a didactic exercise than a request for review. This deficiency, however, does not pervade the rest of the appellate preparation and will not deprive the appellant of our review on the merits.
The facts essential for decision of this dispute were stipulated to the trial court:
The plaintiffs Beauchamp listed their two lots for sale. Thereafter, the Zieglers applied to Peoples Home and Savings Association (predecessor of defendant North American Savings Association) for a loan of $14,400--the full purchase price--to be secured by a deed of trust on the lots and by $4500 deposited by plaintiffs Beauchamp from the proceeds of the Ziegler loan into a savings account with the defendant Association pledged as security for repayment. The lots were conveyed by the plaintiffs Beauchamp to the Zieglers.
Two years later, the Zieglers conveyed the lots to Costner, subject to the indebtedness of deed of trust to the Association, which Costner assumed and agreed to pay. The Association did not exercise its option to declare the Ziegler debt immediately due and payable by reason of the conveyance to Costner. At that date, the principal balance of the Ziegler loan was about $9900.
Some months later, the Ziegler loan came into default and the successor Association proceeded with foreclosure. The lots were bid in by the Association for $7001 so that the principal amount of $6484.41 remained unpaid on the debt. The plaintiffs Beauchamp thereupon made demand on the successor Association for restitution of the $4500 savings account deposit, but the Association claims that sum under the guaranty agreement and has refused the demand.
The trial court rejected the postulate of the plaintiffs Beauchamp that they were discharged from their pledge obligation because the Association, by accession to the assumption by Costner of the Ziegler indebtedness, materially changed the nature of the Beauchamp pledge obligation to the Association. As a result, they contend, they are now free of liability under that agreement and are entitled to return of the $4500 pledge.
A transaction of guaranty is a species of contract with at least three parties: a promisor, a creditor (to whom the promise is made) and a debtor. The guaranty arises when the promisor makes a promise to the creditor either as to the solvency of the debtor or as to the payment of the debt. Industrial Bank & Trust Co. v. Hesselberg, 195 S.W.2d 470 (Mo.1946); 38 Am.Jur.2d, Guaranty, § 1. A guaranty is a collateral agreement for performance of the undertaking of another, and so imports two different obligations: that of the principal debtor and that of the guarantor. Four-Three-O-Six Duncan Corp. v. Security Trust Co., 372 S.W.2d 16, 23(6) (Mo.1963); Kelly-Springfield Tire Co. v. Hamilton, 230 Mo.App. 430, 91 S.W.2d 193, 195(1) (1936). The liability of the guarantor, therefore, does not arise in the absence of a liability on the principal undertaking to which it is collateral. 38 C.J.S., Guaranty § 2. The obligations of the guarantor are construed strictissimi juris and will not extend beyond what he is fairly bound to by the precise terms of his contract. This favoritism flows from the assumption of public policy...
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...a contract of suretyship gives rise to a joint and several obligation of the principal and surety. Beauchamp v. North American Savings Association, Mo.App., 543 S.W.2d 536, 538 (1976). The obligation of a surety is direct not collateral. W. T. Rawleigh Co. v. Warrington, Del.Super., 199 A. ......
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