Burkhardt v. Bank of America Nat. Trust & Sav. Ass'n, 16850

• Decision Date: 16 March 1953
• Docket Number: No. 16850,16850
• Citation: 41 A.L.R.2d 1207,127 Colo. 251,256 P.2d 234
• Parties: , 41 A.L.R.2d 1207 BURKHARDT v. BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N.
• Court: Colorado Supreme Court

Page 234

256 P.2d 234

127 Colo. 251, 41 A.L.R.2d 1207

BURKHARDT v. BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N.

No. 16850.

Supreme Court of Colorado, en Banc.

March 16, 1953.

Rehearing Denied April 20, 1953.

Phelps, Wittelshofer & Calkins, Denver, Robert L. Gee, Denver, for plaintiff in error.

Rothgerber, Appel & Powers, Ira Rothgerber, Jr., Denver, for defendant in error.

HOLLAND, Justice.

This is an action on a guaranty for payment of rent. Counsel for defendant in error say, 'The only issue in this case is the validity of this agreement, and whether plaintiff in error is liable thereunder.' Counsel for plaintiff in error, to whom we will herein refer as defendant, contend that the guaranty involved lacks consideration; that it is a special guaranty and not general; that being special, any rights thereunder did not descend to the heirs of the guarantee. There are other questions raised by defendant concerning this guaranty that are not controlling within themselves; however, they are involved in the consideration of the principal questions.

C. J. Reavis and Margaret C. Reavis, as the owners of premises known as 8660 Atlantic Boulevard, Los Angeles county, California, on June 26, 1946, leased the premises to the Pacific Supply Company, a limited partnership, of which C. C. Dawson was the sole general partner. The lease was for a period of ten years, ending November 30, 1955, for a total rental of $96,000, payable at the rate of $800 per calendar month beginning December 1, 1945. $9,600 was paid at the time of the execution of the lease, and rental for the last twelve months of the term was to be $1 per month.

On July 25, 1946, the Reavis' ownership was sold and conveyed to Maurice Horn, Jr. The lease provided that:

'The lessee shall not let or under-let the whole or any part of said premises, nor sell or assign this lease, either voluntarily or by operation of law, nor allow said property to be occupied by anyone contrary to the terms hereof, without the written consent of the lessor.'

and it is further provided:

'Lessee shall have the right to assign this lease to a corporation of which lessee has controlling interest, by sending to lessor a copy of the corporation minutes showing said assignment by registered mail.'

On February 20, 1947, the Pacific Supply Company assigned said lease to the Dawson Manufacturing Corporation, of which C. C. Dawson was the controlling stockholder and Herman A. Burkhardt, defendant herein, was a shareholder and secretary. On July 12, 1948, nearly a year and a half after this last assignment, Dawson and Burkhardt entered into an agreement with Horn whereby the provision of the lease hereinbefore set out concerning the underletting of the premises without the written consent of the lessor was waived, and in consideration of this waiver by Horn, they--Dawson and Burkhardt--obligated themselves jointly and severally to pay to said Horn the rentals reserved in the lease as provided, and guaranteed the payment of the installments of rent and each of them by the Dawson Manufacturing Corporation should said Dawson Manufacturing Corporation fail so to do. 'The obligations of this agreement shall be binding upon the said Herman A. Burkhardt and Clyde C. Dawson and their respective heirs, personal representatives and assigns.' This agreement was signed by Burkhardt and Dawson and executed by the Dawson Manufacturing Corporation.

The premises were occupied by the Pacific Supply Company and the Dawson Manufacturing Corporation until November 1, 1949, and on that date became vacant and so remained until December 4, 1950, on which date, plaintiff bank leased the premises to Panacalite Pacific for $550 per month for a term beginning January 1, 1951 and expiring December 31, 1955. It is shown that no rentals were paid by the Dawson Manufacturing Corporation or Dawson after November 1, 1949 up to the date of the commencement of this action.

Horn died testate on August 13, 1948, and distribution of the assets of his estate has been made; plaintiff bank, defendant in error here, is the testamentary trustee under the will, and in that capacity, it filed this action to recover from Burkhardt, now of Denver, under the terms of the guaranty. The issues were tried to the court on the complaint and Burkhardt's answer, in which he admitted the execution of the lease and its assignment and the execution of the purported guaranty, but he alleged in that connection, that it was without consideration; denied that a claim had been stated by the complaint upon which relief could be granted; that the guaranty...