Davis v. B. C. L. Enterprises, Inc., 1-280A40
| Decision Date | 09 July 1980 |
| Docket Number | No. 1-280A40,1-280A40 |
| Citation | 406 N.E.2d 1204 |
| Parties | Marshall DAVIS, Sr., Plaintiff-Appellant, v. B. C. L. ENTERPRISES, INC., Robert R. Cover and C. Lawrence Lewis, Defendants-Appellees. |
| Court | Indiana Appellate Court |
E. Edward Dunsmore, Knightstown, James R. White, New Castle, for plaintiff-appellant.
George J. Lewis, Ronald R. Pritzke, Lineback & Lewis, P. C., Greenfield, for defendants-appellees.
Marshall Davis, Sr. (Davis) appeals the decision of the trial court in a case tried to the court, which awarded Davis a recovery of $50,000 from B.C.L. Enterprises, Inc., but denied any recovery from the individual defendants, Robert R. Cover (Cover) and C. Lawrence Lewis (Lewis). We affirm.
Davis was the assignee of a lease originally executed between B.C.L. and Thomas and Kathryn Cashdollar. The lease, which was for fifteen years, was entered into on July 25, 1969, and signed by Lewis and Cover as agents for B.C.L. Cashdollar testified that a guaranty was attached to the lease when it was sent to Cover and Lewis. Lewis testified, however, that a guaranty was not attached when he signed the lease in July, 1969, and further, that he would not have signed it because of the limited liability aspect afforded to the corporation. Cashdollar testified that when he realized the guaranty was not signed, he took it personally to Lewis and Cover and had them sign it. Lewis testified that the guaranty was signed because Cashdollar needed it to complete financing arranged through the building and loan. There was no date affixed to the guaranty, but it appears it was not signed until December 1, 1969. The restaurant, which was the subject of the lease, began business around November 1, 1969.
Cashdollar assigned the lease to Davis in 1973, who received rents until August, 1974, when the building was abandoned by B.C.L. A complaint was filed by Davis on November 18, 1974, and judgment was entered on August 20, 1979.
The sole issue preserved for appeal is whether the trial court erred as a matter of law when it failed to render a judgment against Lewis and Cover as guarantors of the lease.
We note initially, that on appeal from a trial before the court without a jury, it is well recognized that an appellate court will not disturb the judgment of the trial court unless that judgment is clearly erroneous. Tarrant v. Self (1979), Ind.App., 387 N.E.2d 1349.
Davis contends that Cover and Lewis are liable as individual guarantors because the guaranty was direct and certain and both Lewis and Cover knew what they were signing and what it meant. See 14 I.L.E. Guaranty § 4. Further, Davis alleges that no consideration was necessary as the guaranty and contract for lease should be read together as being part of the same consideration. We cannot agree.
A guaranty must have consideration to support it. If the guaranty is made at the time of the contract to which it relates, so as to constitute a part of the consideration of the contract, it is sufficient. Singer Manufacturing Co. v. Forsyth (1886), 108 Ind. 334, 9 N.E. 372. "A guaranty is an independent contract, by which the guarantor undertakes in writing, upon a sufficient consideration, to be answerable for the debt, or for the performance of some duty, in case of the failure of some other person, who is primarily liable to pay or perform." Indianapolis Morris Plan Corp. v. Sparks (1961), 132 Ind.App. 145, 151, 172 N.E.2d 899, 902 (citations omitted, emphasis added).
Our task, then, is to determine whether new consideration was required or whether the past consideration was sufficient. In this case, wherein the guaranty was not signed until four months after the signing of the lease, and one month after the restaurant began operation, new consideration was necessary in order to support the guaranty.
Where a guaranty is executed subsequently to the principal...
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