First Federal Sav. & Loan Ass'n of South Carolina v. Dangerfield

• Decision Date: 12 November 1991
• Docket Number: No. 1774,1774
• Citation: 307 S.C. 260,414 S.E.2d 590
• Parties: FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF SOUTH CAROLINA, Respondent, v. Clyde M. DANGERFIELD, Jr., Linda Dangerfield, John Watkins, Judy Watkins and Margaret H. Bivens, of whom Margaret H. Bivens, is Appellant. Appeal of Margaret H. BIVENS. . Heard
• Court: South Carolina Court of Appeals

Page 590

414 S.E.2d 590

307 S.C. 260

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF SOUTH CAROLINA, Respondent, v. Clyde M. DANGERFIELD, Jr., Linda Dangerfield, John Watkins Judy Watkins and Margaret H. Bivens, of whom Margaret H. Bivens, is Appellant Appeal of Margaret H. BIVENS.

No. 1774.

Court of Appeals of South Carolina.

Heard Nov. 12, 1991.

Decided Feb. 24, 1992.

Rehearing Denied March 18, 1992.

Certiorari Denied Aug. 12, 1992.

Walter E. Bilbro, Jr. of Bilbro & Associates, and Fred Thompson, III of Scardato & Thompson, Charleston, for appellant.

John J. Dodds, III of Woody, Bargmann, Cisa, Stiles & Dodds, Charleston, for respondent.

BELL, Judge:

First Federal Savings and Loan Association filed this action against the Defendants, jointly and severally, seeking to collect on Guaranty Agreements executed in favor of First Federal. The trial judge granted First Federal's motion for summary judgment. Margaret Bivens appeals. We affirm.

Under Rule 56(c) S.C.R.Civ.P. summary judgment must be granted if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. See, Estate of Cantrell v. Green, 302 S.C. 557, 397 S.E.2d 777 (Ct.App.1990).

Clyde Dangerfield, John Watkins, and Joseph Bivens incorporated A Professional Moving and Storage of Charleston, Inc. Dangerfield contributed some capital and leased the company certain equipment. Bivens's wife, Margaret, leased the company approximately $200,000 worth of trucks and moving equipment.

Dangerfield, Watkins, and Mrs. Bivens were to be equal shareholders in the Charleston company. Watkins served as president, Dangerfield as vice president and secretary, and Greg Kimsey as treasurer. Watkins managed the Charleston company with Mr. Bivens as an employee. Mrs. Bivens was not involved in the management or operation of the Charleston company. At about the same time the Charleston company was being started, Watkins was opening another moving and storage company in Greenville. Its name was "A Professional Moving and Storage, Inc."

In early November, 1987, Dangerfield, Kimsey, and Watkins, as officers of the Charleston company, met with Joseph Palisi, vice president of First Federal, about a loan for the Charleston company. After completing the loan application, Palisi approved two loans for the Charleston company. One loan was a term loan in the amount of $170,000 and the second was an $80,000 revolving line of credit. Both loans listed the borrower as "A Professional Moving and Storage, Inc."

The loans were secured by the Charleston company's moving equipment, warehouse equipment and receivables. Palisi also required personal guaranties from the stockholders and their spouses. He, however, did not require Mr. Bivens to give a personal guaranty. The primary obligor on all five of the personal guaranties was "A Professional Moving and Storage, Inc." The term of the guaranty was to continue until the obligation was retired or until the guarantors gave First Federal written notice of termination.

In accordance with the loan agreement, First Federal, on November 11, 1987, issued a check to A Professional Moving and Storage, Inc. in the amount of $169,804 representing the proceeds from the $170,000 loan. On December 4, 1987, Watkins, as president of the Charleston company, requested a draft on the $80,000 line of credit. As Watkins requested, First Federal transferred the $80,000 into two separate banking accounts maintained by the Charleston company.

In late November, 1987, the Charleston company's bookkeeper, Mary Cooney, told Mr. Bivens, Dangerfield had taken a large sum of money from the bank loan. She also said he had inflated the financial information on the loan application. Mr. Bivens told his wife this information. Mrs. Bivens asked her husband to talk to Palisi at the bank. When Mr. Bivens went to the bank, he told Palisi he had information that the loan was being used improperly. He told Palisi the funds were being used for another company in Greenville. He asked to see the Charleston company's loan application because he felt Dangerfield had used false financial information to obtain the loan. Palisi refused. After Mr. Bivens left, Palisi called Dangerfield who told him Mr. Bivens was a disgruntled employee and not to listen to him.

Subsequently, Mrs. Bivens requested the Charleston company to account for the loan proceeds. At the accounting in early December, 1987, the records showed the Charleston company paid Dangerfield $50,000 and Watkins $23,000 among other payments.

Thereafter, in the presence of Mrs. Bivens and Dangerfield, Mr. Bivens called Palisi and told him about the payments to Dangerfield and Watkins. He asked Palisi to stop any payments to the Charleston company and to do whatever was necessary to prevent any more loss. Palisi asked to speak with Dangerfield. Dangerfield told him he would see him in a couple of days.

During the latter part of the first quarter of 1988, Watkins and Dangerfield told Palisi the Charleston company was not doing well and the officers and directors had decided to sell it as a going concern or in the alternative to wind it up and liquidate its assets. Palisi advised Dangerfield to keep him informed of the company's efforts to sell the assets but the loan payments must be kept current. Several pieces of equipment were sold and the sale price applied towards the loan.

On June 27, 1988, Watkins and Dangerfield, as officers of the Charleston company, applied and received an extension of the loan payment from First Federal. The extension allowed the late principal and accrued interest payments to be paid in full within a period of 60 days. Palisi did not advise Mrs. Bivens of this change. Two days later, the Charleston company filed for bankruptcy.

I.

Mrs. Bivens argues summary judgment was improper because there existed a material issue of fact as to whether she is liable on her guaranty when the loan documents incorrectly listed the Greenville company as the borrower instead of the Charleston company.

The name of Mrs. Bivens's company was A Professional Moving and Storage of Charleston, Inc. Watkins began another moving company under the name of A Professional Moving and Storage, Inc., in Greenville. Mrs. Bivens asserts all of the loan documents and her guaranty were in the name of the Greenville company. She contends she should not be liable for a company's debt in which she has no pecuniary interest.

It is undisputed that Watkins and Dangerfield, as officers of the Charleston company, were given the authority by a corporate resolution to borrow money from First Federal. They prepared the loan documents listing the Charleston...