Bowyer v. Clark Equipment Co., No. 2--1174A281

• Docket Nº: No. 2--1174A281
• Citation: 357 N.E.2d 290, 171 Ind.App. 431
• Case Date: December 08, 1976
• Court: Court of Appeals of Indiana

Page 290

357 N.E.2d 290 171 Ind.App. 431 Larry BOWYER, Appellant (Defendant below),
v.
CLARK EQUIPMENT COMPANY et al., Appellees (Plaintiffs below). No. 2--1174A281. Court of Appeals of Indiana, First District. ¹ Dec. 8, 1976.
Rehearing Denied Jan. 20, 1977.

[171 Ind.App. 432]

Page 291

R. M. Rhodes, Jeffry G. Price, Rhodes & Price, Peru, for appellant.

Daniel J. Harrigan, Bayliff, Harrigan, Cord & Maugans, Kokomo, for appellees.

LYBROOK, Judge.

Defendant-appellant Larry Bowyer appeals from a trial court judgment awarding the plaintiffs the sum of $41,522.20 on an action for indebtedness. Bowyer presents the following issues for review:

(1) Whether defendant, as a guarantor, was discharged from his guaranty obligation, as a result of plaintiffs' failure to give timely notice of the principal's default?

(2) Whether the trial court's judgment was contrary to the law and the evidence?

The record reveals that Emry Equipment Company, Inc., (Emry) a co-defendant at trial, was in the business of selling and leasing various machinery manufactured by Clark Equipment Company. The Clark companies, plaintiffs-appellees in this action, on January 28, 1971, granted Emry Equipment Company, Inc., exclusive dealership rights to sell and lease Clark Equipment in Howard County and the surrounding area. [171 Ind.App. 433] Emry entered into a security agreement with the various Clark companies on April 13, 1971, which gave the Clark companies a security interest in the floorplanned equipment which Emry sold and leased. The floor planning arrangement allowed Emry to obtain Clark equipment by borrowing the necessary funds from the Clark Equipment Credit Corporation. Emry would then have up to six months to pay off the account debts for the equipment purchased.

Before approving Emry for a Clark dealership, the Clark companies required that Emry obtain a guaranty agreement securing its financial stability. Larry Bowyer, the owner of Bowyer Excavating Company and previous owner of Emry Equipment Company, agreed to guarantee Emry, and on November 1, 1970, signed the following guaranty agreement:

'GUARANTY

Date November 1, 1970

Clark Equipment Company

324 East Dewey Avenue

Buchanan, Michigan

Page 292

Clark Equipment Credit Corporation

324 East Dewey Avenue

Buchanan, Michigan

Clark Leasing Corporation

324 East Dewey Avenue

Buchanan, Michigan

Clark Rental Corporation

324 East Dewey Avenue

Buchanan, Michigan

Gentlement:

In order to induce any one or more of you to enter into contracts with, make a loan or loans to, or extend credit to Emry Equipment Co., Inc., an Indiana corporation, with principal offices at R.R. 3, Box 415A, Kokomo, Indiana (herein called 'BORROWER') and in consideration of such entering into contracts, making of loans, or extensions of credit, the undersigned hereby, jointly and severally, absolutely guarantee the full and prompt payment of any and every indebtedness, liability or obligation (howsoever arising and of any nature whatever), which may now or [171 Ind.App. 434] at any time and from time to time hereafter exist or be incurred by BORROWER to any one or more of you, together with all interest thereon and reasonable attorneys' fees, costs and expenses of collection incurred by any one or more of you in connection therewith. In the event of default at any time by BORROWER, we promise to pay such indebtedness, liability or obligation on demand.

It is understood and agreed that you shall not be obligated by reason of this agreement to sell to, enter into contracts with, make a loan or loans to, or extend credit to BORROWER.

We consent that any one or more of you may, without in any manner affecting our liability and upon such conditions as any one or more of you may deem advisable: (1) Extend in whole or in part (by renewal or otherwise), modify, premature, change or release any indebtedness, liability or obligation of BORROWER or of any other person; (2) Sell, release, surrender, modify, impair, exchange, substitute, or (if a chose or choses in action) extend the duration of the time for the performance or payment of any and all property, of any nature and from whomsoever received, held by you or any one or more of you as security for the payment or performance of any indebtedness, liability or obligation of BORROWER to you; (3) settle, adjust or compremise any of your claims against BORROWER or any other person. The undersigned hereby ratify and confirm any such extension, renewal, release, surrender, exchange, modification, impairment, substitution, settlement, adjustment, compromise, and agree that the same shall be binding upon the undersigned, and hereby waive any and all defenses, counterclaims, or offsets which the undersigned might or could have by reason thereof, it being understood that the undersigned, as guarantor hereunder, shall at all times be and remain liable to you and each of you.

The undersigned hereby waive: (1) Notice of (and acknowledge due notice of) acceptance of this Guaranty by you or of the creation, renewal or accrual of any liability of BORROWER, present or future, or of your reliance upon this Guaranty (it being understood that any and every liability and obligation of BORROWER to you shall conclusively be presumed to have been created, contracted or incurred in reliance upon this Guaranty); (2) Demand of payment from any person indebted in any manner on or for any of the liabilities or obligations hereby guaranteed; (3) Presentment for payment of any instrument[171...