Connecticut Bank and Trust Co. v. Wilcox

Decision Date16 December 1986
Docket NumberNo. 12757,12757
Citation201 Conn. 570,518 A.2d 928
CourtConnecticut Supreme Court

David S. Grossman, Brookfield, for appellants (defendants).

Jackson T. King, Jr., New Haven, with whom, on the brief, was Mary E. Holzworth, Norwich, for appellee (plaintiff).


PETERS, Chief Justice.

The principal question on this appeal, in a case involving the loss of a letter of guaranty, is whether the Appellate Court correctly determined that the issues concerning the enforceability of the guaranty raised only factual matters that did not warrant extended appellate consideration. The plaintiff, the Connecticut Bank and Trust Company, brought an action against the defendants, Pamela Wilcox and Annelaine L. Lotreck, alleging that they were liable as guarantors of debts incurred by the Wilcox Pallet Company. The trial court found the issues for the plaintiff and rendered judgment holding the defendants liable. The defendants appealed to the Appellate Court which, in a per curiam decision, found no error. After their petition for certification was granted, the defendants appealed to this court. We affirm the judgment of the Appellate Court.

The trial court made the following findings of fact. On September 9, 1980, the defendants, the officers of the Wilcox Pallet Company, executed a letter of guaranty under which they guaranteed the payment of any and all amounts "due or to become due, now existing or hereafter arising" out of the liabilities of the corporation to the plaintiff. The defendants submitted their personal financial statements to the plaintiff in the spring of 1981. Thereafter, in April and November of 1981, the corporation executed three promissory notes manifesting its indebtedness to the plaintiff in the total amount of $88,650. These loans were part of a line of credit extended by the plaintiff to the corporation; the line of credit had been expressly conditioned upon "the continued maintenance of a sound financial condition on the parts of both the company and the guarantors." Employees of the plaintiff saw the defendants' letter of guaranty on two different occasions: in April, 1981, and in September, 1981. Subsequently, however, when the plaintiff learned, in December, 1981, that the corporation was having financial difficulties, the plaintiff sought the letter of guaranty, but could not locate it. The plaintiff conducted a diligent and extensive search for the letter of guaranty, but was unable to find it.

On the basis of these findings of fact, the trial court concluded that the defendants were liable as guarantors for the debts incurred by the corporation to the plaintiff. The court determined that the plaintiff had made no misrepresentations to the defendants at the time of the execution of the line of credit. It held that the guaranty was valid and binding despite a delay of several months between the execution of the letter of guaranty and the execution of the line of credit. It determined that the plaintiff had relied upon the continued liability of the defendants, evidenced by the letter of guaranty, when the plaintiff made and renewed loans to the corporation. The court therefore rendered judgment against the defendants in the amount of $103,328.82, representing principal and interest on the notes, together with legal interest thereon from February 1, 1983, and attorney's fees of $7500.

The Appellate Court summarily upheld the judgment of the trial court. Connecticut Bank & Trust Co. v. Wilcox, 3 Conn.App. 510, 490 A.2d 95 (1985). That court found no error in the trial court's ruling permitting the plaintiff belatedly to amend its complaint; id.; an issue that the defendants have chosen not to pursue further. The Appellate Court held that "the remaining claims of error" raised nothing further than "conclusions of fact" and thus did not warrant plenary review. Id., at 510-11, 490 A.2d 95.

This court thereupon granted the defendants' petition for certification, which alleged the existence of two questions of substance warranting a further appeal to this court. The petition for certification described the questions as: (1) the reasonableness and diligence of the search of a lost document required to be in writing under the statute of frauds; and (2) the availability of a defense of estoppel to prevent enforcement of a guaranty which allegedly lacks consideration. We will consider each of these questions separately.

This court has not, for many years, considered the quantum of proof that is required when secondary evidence is produced to establish the contents of a document that has been accidentally lost or destroyed. The cases and the commentaries are, however, in substantial agreement that a party must undertake a twofold burden in order to recover on a document that he cannot produce. Such a party must demonstrate both (a) the former existence and the present unavailability of the missing document, and (b) the contents of the missing document. Woicicky v. Anderson, 95 Conn. 534, 536, 111 A. 896 (1920); Kelsey v. Hanmer, 18 Conn. 311, 317 (1847); Witter v. Latham, 12 Conn. 392, 399 (1837); C. McCormick, Evidence (3d Ed.1984) § 53, pp. 138-39. The legislature has adopted a similar policy with regard to an action to enforce a negotiable instrument that is lost by "destruction, theft or otherwise." General Statutes § 42a-3-804; 1 see J. White & R. Summers, Uniform Commercial Code (2d Ed.1980) § 13-22. At least in a trial to the court, there is no particular sequence in which the party relying on a lost document must present evidence to satisfy his twofold burden. See Fitch v. Bogue, 19 Conn. 285, 290-91 (1848). 2 Finally, there is no automatic enhancement of that burden of proof merely because, under the applicable provisions of the statute of frauds; General Statutes § 52-550; 3 the contract in question was required to be memorialized in a written memorandum. Section 137 of the Restatement (Second) of Contracts (1981) expressly provides: "The loss or destruction of a memorandum does not deprive it of effect under the Statute [of Frauds]." See also Computer Servicenters, Inc. v. Beacon Mfg. Co., 328 F.Supp. 653, 655 (D.S.C.1970), aff'd, 443 F.2d 906 (4th Cir.1971); Alvin Epstein Advertising v. Helfer, 138 A.2d 925, 927 (D.C.1958); Mossman v. Hawaiian Trust Co., 45 Hawaii 1, 9-10, 361 P.2d 374 (1961); Capital Bank & Trust Co. v. Richman, 19 Mass.App. 515, 519-22, 475 N.E.2d 1236 (1985); Aesoph v. Golden, 367 N.W.2d 639, 642 (Minn.App.1985); Chakur v. Zena, 233 S.W.2d 200, 202 (Tex.Civ.App.1950); 2 A. Corbin, Contracts (1950 & Sup.1971) § 529; 4 S. Williston, Contracts (3d Ed. Jaeger 1961) § 579A. In any dispute concerning the existence, loss or terms of a missing document, it is appropriate for the parties to bring to the court's attention whatever evidence, direct or circumstantial, written or oral, the trial court may find relevant and persuasive.

We agree with the conclusion of the Appellate Court that the application of these principles to the particular circumstances of this case involved nothing more than the resolution of disputed questions of fact. The trial court made a finding of fact when it determined that the plaintiff had met its burden of proving that the guaranty had been lost and, despite the plaintiff's diligent search, could not be produced at trial. The trial court similarly made a finding of fact when it held that the terms of the missing guaranty were identical to those contained in the plaintiff's standard form for a letter of guaranty, that form having been admitted as an exhibit at trial.

The defendants' alternate claim of Appellate Court error argues that the guaranty was unenforceable as a matter of law because of an alleged absence of consideration. This argument apparently hinges upon the fact that there was an interval of several months between the execution of the guaranty and the execution of the corporate notes whose payment the defendants are alleged to have guaranteed. As a matter of law, this argument is untenable. A continuing guaranty is enforceable, for those transactions within its contemplation, if the creditor makes subsequent advances by reason of the outstanding guaranty. Both our case law and the modern law of contract eschew any requirement of...

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21 cases
  • Constantine v. Schneider
    • United States
    • Connecticut Court of Appeals
    • July 14, 1998
    ...144 Conn. 594, 597, 136 A.2d 338 (1957); Connecticut Bank & Trust Co. v. Wilcox, 3 Conn.App. 510, 490 A.2d 95 (1985), aff'd, 201 Conn. 570, 518 A.2d 928 (1986). " 'The essential tests are whether the ruling of the court will work an injustice to either [party] and whether the granting of th......
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    ...the Restatement (Second) of Contracts (1981), which has been cited favorably by our Supreme Court; see Connecticut Bank & Trust Co. v. Wilcox, 201 Conn. 570, 576, 518 A.2d 928 (1986); provides: “A promise to be surety for the performance of a contractual obligation, made to the obligee, is ......
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