Indianapolis Morris Plan Corp. v. Sparks

• Decision Date: 22 March 1961
• Docket Number: No. 1,No. 19237,19237,1
• Citation: 132 Ind.App. 145,172 N.E.2d 899
• Parties: INDIANAPOLIS MORRIS PLAN CORPORATION, Appellant, v. Ruby Lois SPARKS, Appellee
• Court: Indiana Appellate Court

Page 899

172 N.E.2d 899

132 Ind.App. 145

INDIANAPOLIS MORRIS PLAN CORPORATION, Appellant, v. Ruby Lois SPARKS, Appellee.

No. 19237.

Appellate Court of Indiana, Division No. 1.

March 22, 1961.

Rehearing Denied April 26, 1961.

Nathan Nisenbaum, Indianapolis, for appellant.

Dale & Dale, Indianapolis, for appellee.

AX, Chief Justice.

The issues in this case were made by the filing of a complaint on a note in one paragraph by the appellant, Indianapolis Morris Plan Corporation, against the appellee, Ruby Lois Sparks, and her former husband, Roy Sparks, wherein the appellant sought to recover the deficiency balance on a note secured by a chattel mortgage. The appellee filed an answer in the nature of non est factum, a Second Paragraph of Answer in Denial, and a Third Paragraph of Answer charging failure of consideration and fraud. The appellant filed a Reply in Denial to the appellee's Third Paragraph of Answer putting the case at issue and the cause was tried by the court.

The finding of the court was in favor of the appellee that the appellant was not entitled to recover from the appellee in this action and that costs should be assessed against the appellant. After judgment was rendered accordingly, the appellant filed its Motion for a New Trial which was overruled and this appeal follows:

Appellant assigns as error that the court below erred in overruling its Motion for a New Trial. The ground for a new trial urged by appellant was that the decision of the court is contrary to law.

There is no dispute in this case as to the facts, since the appellant and appellee filed an Agreed Statement of Facts, and all exhibits were admitted and read into evidence without objection.

This stipulation of facts shows the following: Appellee, Ruby Lois Sparks, and her husband, Roy Sparks, on July 10, 1952, executed a promissory note for $320.00 to the appellant corporation which is duly incorporated and licensed in Indiana under the Indiana Industrial Loan and Investment Act, Burns' Ann.St. § 18-3101 et seq. On the same day Ruby the Roy entered into an agreement hereinafter referred to as appellant's Exhibit No. 1, which is herein set out:

'In consideration of any loans or advances that you may now or hereafter make to either of us, or in consideration of any notes or contracts that you may now or hereafter purchase from either of us, and for the purpose of enabling either of us to obtain credit from you:

'Each of us hereby guarantees and as surety individually promises the prompt payment at maturity of any and all indebtedness upon which either of us now is or may hereafter become obligated or bounden to you either as principal, guarantor, surety, endorser, co-maker, or assignor on any and all notes or contracts executed, assigned, or sold to, or discounted with you by either of us and endorsed with recourse, partial recourse, repurchase, partial repurchase, or optional repurchase; Each of us hereby agrees that each shall be bound as principal and in the same degree and to the same extent as any one of us upon any abligation of any nature whatsoever, whether direct or indirect, in respect of which any one of us shall become obligated to you; and the signature of any one of us upon any instrument or document evidencing any such obligation as hereinabove described shall be taken and deemed to be the joint and several signatures of each of us;

'Each of us hereby appoint, makes, and designates each of the others his attorney-in-fact and agent for and on his behalf and in his place and stead to obtain loans from you, to receive the proceeds of such loans, and to make, execute and deliver to you any notes and renewal notes evidencing indebtedness to you, and any chattel mortgage, assignment, contract, or other written instrument covering or pertaining to any property owned by any one of us individually, jointly, or in common with any one else to secure the repayment of any indebtedness upon which any one of us now is or hereafter may become obligated or bounded to you;

'Each of us hereby agrees that the individual signature of any one of us shall be construed to be his signature in his capacity as such agent as well as individually;

'Each of us hereby waives presentment and demand for payment, protest and notice of protest for nonpayment and relief from valuation and appraisement laws; consents that extension of time of payment be granted to any of us or any obligor of any notes, contracts, or other evidence of indebtedness executed or assigned to you by any of us without notice to and without releasing the liability of any of us; and waives notice of acceptance of this agreement and of all things done pursuant to this agreement;

'Each of us hereby agrees to pay all costs and expenses, including attorney fees, incurred by you in enforcing any obligation of any of us;

'Each of us hereby agrees that it shall not be necessary for the holder hereof to resort to legal remedies against any one or all of us before proceeding against any other of them, and that no release of one or more of us, whether by operation of law or by any action of the holder of this agreement, shall release any other of us;

'Each of us hereby agrees that all the terms and provisions of this agreement shall be and remain in every particular available to your successors and assigns, and shall be and remain fully binding upon all successors and assigns, including heirs, executors and administrators of each of us; but this agreement shall terminate after thirty (30) days following receipt by you from any of us, by registered mail with return receipt, of notice of termination provided, however, that such termination shall not affect your rights arising from any transaction between you and any of us prior to the expiration of such thirty (30) day period.

'Each of us hereby ratifies and confirms all that any one of us may do or perform hereunder either for himself individually, or in any other capacity for any one or all of us;

'Each of us hereby agrees that the masculine singular pronoun wherever used herein shall mean and include both feminine and plural pronouns wherever applicable.

'Dated this 10 day of July 1952'

In order to obtain this loan, Roy executed a chattel mortgage on a 1948 two-door Oldsmobile automobile and a 1948 Three Star General House Car, signing his name and the name of his wife by Roy Sparks, agent. Ruby did not at that time give her husband any specific permission to sign her name, and did not receive any benefit from the loan. Neither did she have any knowledge of the execution of the note nor the mortgage.

The appellee Ruby never revoked nor attempted to revoke the said agreement. Roy and Ruby were divorced on November 29, 1954. Roy had paid $143.00 on said note but refused to pay the installment due on February 4, 1954. By reason of the default, according to the contract the entire amount became due. In April of 1954, the appellant corporation obtained possession of the automobile and the house car and sold the same at a private sale without notice for $165.00, leaving a deficiency of $1,292.14.

The primary question confronting this court is whether or not the Exhibit No. 1 above set out is a valid and binding agreement upon the appellee. The appellant contends that it is an absolute and continuing guaranty that it was binding upon the appellee at the time the defendant Roy executed a promissory note and a chattel mortgage to secure said note and signed the name of appellee Ruby to said note and said mortgage as agent pursuant to the terms of said absolute and continuing guaranty.

Appellee contends that said Exhibit No. 1 is not an absolute and continuing guaranty and was signed only in order to obtain a $320.00 loan from appellant, which loan was repaid in full; and that Roy who was appellee's husband at the time, conspired with appellant to attempt to use said Exhibit No. 1 to obtain a new loan five times larger than the original one by signing appellee's name and attempting to bind her and a certain 1948 Oldsmobile along with a 1948 Three Star General House car; that appellee knew nothing of this; that appellee did not even know the contents of said Exhibit No. 1 nor had ever had a copy of same; and that appellee received none of the proceeds of the loan so could not be deemed to have ratified it.

Appellee further contends that Exhibit No. 1 is not binding upon appellee as to anything except possibly the note of July 10, 1952, of which it was a part, and which has since been paid in full, and was extinguished by said pay-off. With its demise the appellee had no further connections with transactions entered upon by and between appellant and Roy Sparks.

We are unable to agree with appellant's theory that Exhibit No. 1 is a 'continuing guaranty.' A guaranty requires a third party (the...