National Acceptance Co. of America v. Demes
| Decision Date | 03 October 1977 |
| Docket Number | No. 77 C 755.,77 C 755. |
| Citation | 446 F. Supp. 388 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | NATIONAL ACCEPTANCE COMPANY OF AMERICA, a corporation, Plaintiff, v. Robert W. DEMES and Walter S. Turner, Individually and as partners of D & T Investors, a partnership, and Arthur Robert Steiskal, Defendants. |
James C. Murray, Jr., Katten, Muchin, Gitles, Zavis, Pearl & Galler, Chicago, Ill., for plaintiff.
Richard H. Compere and Gary M. Ropski, Hume, Clement, Brinks, Willian & Olds Ltd., Chicago, Ill., Michael A. Gallo, Nadler & Nadler, Youngstown, Ohio, for defendants.
This is a diversity action brought under 28 U.S.C. § 1332, by National Acceptance Company of America, a finance company incorporated in Delaware and having its principal place of business in Illinois, against three citizens of Ohio, Robert W. Demes, Walter S. Turner, and Arthur R. Steiskal. Plaintiffs allege, and defendants admit, that defendants signed as guarantors of two notes evidencing obligations of one Dart Tool Die and Machine, Inc. to the plaintiff financing company totalling approximately $80,000. It is undisputed that Dart Tool has defaulted on its said obligations and is currently engaged in bankruptcy proceedings not the subject of this action.
Plaintiff commenced this action against the individual guarantors in March, 1977, and filed a complaint in the bankruptcy proceedings of Dart Tool in April, 1977, seeking reclamation of certain property of that corporation in which the finance company claims a security interest given by Dart Tool, to secure the obligations with which we are concerned in this case. The trustee in bankruptcy filed an answer to the reclamation petition, in which he contested the validity of the security interest as against him on the grounds that the finance company had failed to make use of the two filings required by Ohio law to record a security interest in chattel. Having not been advised to the contrary, we assume that the issue is still pending for resolution in the bankruptcy case.
As defenses in the case at bar, defendants assert that the primary obligor, Dart Tool, should have been joined in this action, that plaintiff should be required to look for satisfaction of the obligations first to the collateral given it by Dart Tool and, by way of counterclaim, that it was the parties' intention that the debt be fully secured by said collateral, that plaintiff therefore had a duty properly to perfect its security interest, and that its failure to do so is to defendants' substantial harm. Plaintiff has moved to strike these defenses and the counterclaim, and for summary judgment under Rule 56; the parties have agreed that the motions should be treated together as one for summary judgment.
We look to the parties' agreement as memorialized in their contracts of guaranty, to determine the issues at hand. Although three different agreements are involved, two appearing on the backs of the installment notes executed by Dart Tool and one being a separate contract, the important language in all is identical and the cumulative effect of the agreements is to hold all three defendants liable as guarantors as to the total amount of Dart Tool's indebtedness to the financing company, the amount of which has not been contested.
It is apparent from an examination of the contracts that defendants' contention that Dart Tool is a necessary party to this action cannot stand. The agreement expressly states:
It is difficult to see how the plain meaning of this language can be interpreted to mean anything other than that the parties have agreed that, upon default by Dart Tool, the financing company may proceed directly against the guarantor-defendants for satisfaction of its claim, and that it is not required to join Dart Tool in the action.
Similarly, although defendants contend that the value of the collateral given by Dart Tool must be set off against plaintiff's claim against them, the printed contract belies the fact that such was the parties' agreement:
Upon payment of the obligation, of course, the guarantors will be subrogated to the rights of the financing company in the...
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Pemstein v. Stimpson
...under G.L. c. 106, § 3-606(1)(b), a statutory provision to which we shall turn our attention next. See National Acceptance Co. of America v. Demes, 446 F.Supp. 388 (N.D.Ill.1977). See also Snelling v. State St. Bank & Trust Co., 358 Mass. 397, 404, 265 N.E.2d 350 (1970); Merrimack Valley Na......
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...with similar language have waived their rights. See Exchange Nat'l Bank, 41 U.C.C.Rep. Serv. at 897-98; National Acceptance Co. v. Demes, 446 F.Supp. 388, 391 (N.D.Ill. 1977); Ishak, 48 Ill.App.3d at 617, 363 N.E. 2d at 161-62, 6 Ill.Dec. at 632-33; Jacobson, 39 Ill.App.3d at 1056, 351 N.E.......
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...creditor from the loss otherwise resulting to the surety by action or lack of action of the creditor. Thus, in National Acceptance Co. of Amer. v. Demes, D.C., 446 F.Supp. 388, the court found the surety had excused the creditor from perfecting a security interest from language in the agree......
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