Dykes v. Clem Lumber Co.
| Decision Date | 03 November 1941 |
| Docket Number | Civil 4404 |
| Citation | 58 Ariz. 176,118 P.2d 454 |
| Parties | OSCAR F. DYKES, Appellant, v. CLEM LUMBER COMPANY, a Corporation, Appellee |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment reversed and case remanded for further proceedings.
Messrs Dykes & Selden, for Appellant.
Mr Maurice D. Brown and Mr. T. E. Scarborough, for Appellee.
This is an appeal by Oscar F. Dykes, called defendant, from a judgment in favor of Clem Lumber Company, a corporation called plaintiff. The facts of the case may be stated as follows:
Grover C. Hamby and Alice S. Hamby, his wife, were the owners of certain real estate situate in Phoenix, upon which they desired to erect a residence. They had arranged with the Valley National Bank for a FHA loan of $3,700 for such purpose and entered into a contract with defendant to build it for the price above stated. Before the bank would pay out any of the money on the loan it was necessary that it have a written security from a responsible party that the building would be completed according to owner's specifications and free and clear of any mechanics' or materialmen's liens. Defendant intended to secure the majority of his material from plaintiff and asked it to make the required security, which it did by letter to the bank which reads, so far as material as follows:
and defendant commenced construction of the building. When it was finally finished the cost of the construction in material and labor, which was lienable if not paid, was $4,669.40, or $969.40 in excess of the contract price. Of this amount the greater proportion was due to plaintiff for material. Under the terms of its promise the plaintiff was bound to keep the property free of liens, so that the bank's mortgage would retain its priority. Plaintiff, therefore, obtained discounts from several of the creditors in a manner unnecessary to describe, which reduced the total loss on the contract to $754.23. Thereafter some of these creditors were paid by the bank out of the $3,700, while others were paid directly by plaintiff. All these payments were made with the approval of defendant. When all the other creditors had been satisfied in this manner, plaintiff executed a release of its own right of lien to the bank and the latter turned over to plaintiff the amount of the $3,700 loan which had not already been paid out either to plaintiff or to other creditors, as above. The ultimate result of these transactions was that the property was free from liens, all of the creditors, except plaintiff, had their claims fully satisfied and there was still due plaintiff for materials furnished at the request of defendant for use on the job the sum of $754.23. Plaintiff thereupon brought this action, setting up the letter as above; that in accordance therewith it had been forced to pay to the bank and the defendant the sum of $763.83, which amount was required to complete the dwelling free and clear of all mechanics' and materialmen's liens, and a demand upon defendant for reimbursement and a failure to pay. It asked for judgment for that amount.
It will be seen that the action was one by an alleged guarantor for reimbursement from a principal debtor of the amount the guarantor had been forced to pay by reason of the guaranty. It is urged by defendant that the facts developed by the evidence failed to support such an action.
A guaranty is a collateral promise by one person to answer for the payment of some debt or the performance of some duty in case of the default of a...
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El Rio Santa Cruz Neighbor. v. Department of Hhs
...in case of the default of a third party who, in the first instance, is liable for such payment or performance." Dykes v. Clem Lumber Co., 58 Ariz. 176, 118 P.2d 454, 455 (1941). A guaranty contract is separately enforceable, and may even provide for greater liability than that of the princi......
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Schroeder v. Hudgins, CA-CIV
...his principal's debt is entitled to reimbursement and has an immediate right of action against the principal, Dykes v. Clem Lumber Co., 58 Ariz. 176, 180, 118 P.2d 454, 455 (1941), in litigation with third parties, a guarantor may only defend to the extent of his liability for claims agains......
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Giovanelli v. First Federal Sav. and Loan Ass'n of Phoenix, 1
...liability on the part of the third party, there is nothing to guarantee and there can be no contract of guaranty. Dykes v. Clem Lumber Co., 58 Ariz. 176, 118 P.2d 454 (1941). Applying this rationale to the instant facts, when First Federal and/or its fiduciary agent Lawyers Title 3, had the......
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Kintner v. Wolfe
...that the promise is not original.' Williston on Contracts, 3rd Ed., Vol. 3, sect. 465. The instant case is similar to Dykes v. Clem Lumber Co., 58 Ariz. 176, 118 P.2d 454, in which we 'We think the written agreement on which the suit was based was not a guaranty of an obligation of defendan......