Hofmann Co. v. Meisner

• Decision Date: 16 May 1972
• Docket Number: CA-CIV
• Citation: 17 Ariz.App. 263,497 P.2d 83
• Parties: The HOFMANN COMPANY, an Arizona corporation, Appellant, v. Herbert MEISNER and Jean Meisner, husband and wife, Appellees. 11679.
• Court: Arizona Court of Appeals

Page 83

497 P.2d 83

17 Ariz.App. 263

The HOFMANN COMPANY, an Arizona corporation, Appellant, v. Herbert MEISNER and Jean Meisner, husband and wife, Appellees.

1 CA-CIV 1679.

Court of Appeals of Arizona, Division 1, Department B.

May 16, 1972.

Wolfe & Harris, P.A., by Irwin Harris, Phoenix, for appellant.

Berry & Herrick, by Richard S. Berry, Tempe, for appellees.

JACOBSON, Judge.

This appeal revolves around the question of the liability, both personal and community, arising from the execution of a purported personal guarantee.

In August, 1968, defendant Herbert Meisner, president of Wood Surgeons, Inc., a cabinet manufacturer, applied for credit from plaintiff, the Hofmann Company (Hofmann), a wholesale supplier of building materials. Defendant Meisner filled out a form supplied by Hofmann which was entitled 'Application for Credit.' The top portion of the application consisted of credit information and the bottom portion contained a paragraph which was a guarantee to pay all sums loaned to the corporate debtor, Wood Surgeons. Herbert Meisner signed without designating the capacity in which he signed. Thereafter, plaintiff extended credit to Wood Surgeons for goods and supplies purchased by the corporation.

Upon failure of the corporation to pay the amount owed, plaintiff filed a complaint against Wood Surgeons, Meisner Enterprises ¹ and Herbert Meisner and his wife, Jean, alleging that the sum of $12,715.35 was due and owing for merchandise sold on open account.

The trial court granted judgment in favor of plaintiff against the two corporate defendants in the sum of $12,715.35, plus interest and costs. The court dismissed the complaint against defendants Herbert and Jean Meisner personally and the plaintiff has appealed from that dismissal.

The first question raised by appellant is whether the document signed by Herbert Meisner is a valid personal guarantee for the debts of Wood Surgeons incurred by reason of the credit furnished by Hofmann.

Generally, the interpretation of a contract is a question of law for the court, Kintner v. Wolfe, 102 Ariz. 164, 426 P.2d 798 (1967), and it must determine the intent of the parties from the four corners of the instrument. Richards Development Co. v. Sligh, 89 Ariz. 100, 358 P.2d 329 (1961). If the contract is ambiguous by its terms then parol evidence may be used to explain a ambiguity; but in the absence of fraud, mistake, or other contract-formation defenses, parol evidence may not be used to change, alter, or vary the express terms in a written contract. Brand v. Elledge, 101 Ariz. 352, 419 P.2d 531 (1966).

A brief description of the document is called for. At the very top of the form is the caption 'Application for Credit'. The form is comprised of two parts. The first part consists of a series of questions designed to elicit credit information. The second part, which is located near the bottom of the single-page form, provides as follows:

'Dated _ _, 19_ _

'To: THE HOFMANN COMPANY and to your agent and/or assignee. For value received, the receipt of which is hereby acknowledged, and in consideration of your advancing credit to _ _ Debtor, _ _ I/we, the undersigned, hereby guarantee the prompt payment to you of all amounts now due and owing or which may hereafter become due and owing to you from said debtor entity. Liability of the undersigned shall not be affected or prejudiced by the additional acceptance of a note or evidence of indebtedness, the extension of time, payment arrangement or other indulgence granted to debtor or by agreement affecting said indebtedness, and the undersigned hereby waives notice of all of the aforesaid. The filing of suit or exhaustion of collection or legal remedies against said debtor shall not be a condition precedent to the enforcement of this guarantee and the undersigned hereby expressly waive(s) demand, presentment for payment, protest, notice of protest or diligence. This guarantee shall continue until you have received a notice of termination executed by the undersigned. Should the undersigned elect to terminate this guarantee such termination shall not affect the liability of the undersigned as to accounts and amounts then owing from said debtor. In the event a collection or legal remedy is instituted against said debtor to receive payment due and owing or in the event that suit is instituted on this guarantee the undersigned hereby agrees to pay all costs and such additional sum as a Court may deem reasonable as Attorney's fees.'

and is followed by the signature line where Mr. Meisner signed.

The defendants first contend that the document contains blanks which create an ambiguity as to the intention of the parties, thus invalidating the purported guarantee.

The mere fact that a signed contract contains blanks does not necessarily invalidate it. Reidy v. Almich, 4 Ariz.App. 144, 418 P.2d 390 (1966). It is only invalidated when those unfilled blanks pertain to important matters which render an agreement incomplete. Stevens v. Fanning, 59 Ill.App.2d 285, 207 N.E.2d 136 (1965). However, if the omitted information can be supplied from other parts of the writing itself then the agreement will be upheld as enforceable. 17 C.J.S. Contracts § 65 (1963); Bengimina v. Allen, Mo.App., 375 S.W.2d 199 (1964).

The blanks in the document to which defendants refer immediately precede the guarantee paragraph and pertain to the date and the name of the debtor. The omission of such, in our opinion, is not fatal to the validity of the guarantee. The name of the debtor is readily ascertainable by referring to the top portion of the document which contains the firm name, Wood Surgeons, as the party who is applying for credit.

It is perfectly clear to this court that the document is not ambiguous, that the intent of the parties is readily ascertainable, and that there is no need to resort to parol evidence. The writing is an application for credit and contains a personal guarantee by Meisner that he will personally be liable for any amount of money which Hofmann might extend in credit to the corporate entity, Wood Surgeons.

The defendants further contend that the guarantee is of no effect because of Hofmann's alleged misrepresentation. This misrepresentation appears to be in the form of the agreement as Meisner states that he thought the purpose of the document was simply an application for credit, being so designated, so he did not read it and hurriedly filled it out and signed it.

The mere fact that one does not read a contract which he has signed is not Ipso facto grounds to invalidate the writing. Bradley v. Industrial Commission, 51 Ariz. 291, 76 P.2d 745 (1938). In Bradley, the court said:

'When a person . . . has carelessly signed . . . (a writing) without reading it, the mere fact that he believed it to be something else than what it was, When such belief was not brought about by the misconduct of the other party, furnishes no ground for the admission of parol evidence that he did not mean to execute it, for courts are not under the duty of relieving parties of the consequences of their own gross negligence.' (Emphasis in original) 51 Ariz. at 299, 76 P.2d at 748.

Nor does the title of the document relieve the signer from reading it, especially when we consider the general business practice of...