Yama v. Sigman

165 P.2d 191, 114 Colo. 323, 1945 Colo. LEXIS 157
CourtSupreme Court of Colorado
DecidedDecember 3, 1945
DocketNo. 15,402.
StatusPublished
Cited by11 cases

This text of 165 P.2d 191 (Yama v. Sigman) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yama v. Sigman, 165 P.2d 191, 114 Colo. 323, 1945 Colo. LEXIS 157 (Colo. 1945).

Opinions

Mr. Justice Alter

delivered the opinion of the court.

Louis K. Sigman, Sam S. Sigman and Morris Sigman, copartners doing business under the firm name 'and style of K. & B. Packing & Provision Company, instituted an action in the county court against Frank DeBus and K. G. Yama, individually and doing business under the firm name and style of the Yama Mer[325]*325cantile Company, to recover on an account, and secured a judgment against Yama, who has sued out a writ of error seeking a reversal. Reference will be made to the parties as they appeared in the county court.

Plaintiffs allege that Frank DeBus was indebted to ■them in the sum of $1,184.16 for and on account of goods sold and delivered, the payment of which account was demanded but not made. They further allege that the payment of the DeBus account was guaranteed in writing by defendant, who, upon demand, refused to pay the indebtedness. Defendant Yama in his answer and numerous defenses admitted the execution of the guaranty but denied liability thereunder.

No service of process was had on DeBus; no appearance was entered for him, and, consequently, no judgment was entered against him.

The case was tried to the court without the intervention of a jury, and at the conclusion of plaintiffs’ evidence, defendant interposed his motion to dismiss, which was denied, whereupon defendant elected to stand on his motion, and judgment was entered in favor of the plaintiffs and against the defendant.

The evidence discloses that defendant, doing business as the Yama Mercantile Company, was engaged in the general mercantile business at Oak Creek, Colorado, and prior to 1939 had purchased goods and merchandise from plaintiffs. In the early part of 1939, defendant rented a portion of his establishment to DeBus in which to conduct a meat market. Defendant, while in Denver in January, 1939, called upon plaintiffs and orally agreed to guarantee the payment of the DeBus account provided plaintiffs would furnish him with such merchandise as was necessary. Plaintiffs were not satisfied with defendant’s oral guaranty and insisted that the guaranty be put in writing, and this defendant promised to do. The written guaranty upon which plaintiffs rely is as follows:

[326]*326“The Yama Mercantile Company-Oak Creek, Colorado

February 23, 1939.

“K & B Packing & Provision Co.

1525 Blake Street Denver, Colorado

“Dear Sirs:

“We received your letter of Feb. 20, 1939, in which you inquired about the DeBus Meat Market account.

“At the present time we will take the full responsibility of paying his account if he should fail to do so.

“It is our understanding that he is, to pay his account every two weeks, and if he is unable to, your representative is to notify us immediately.

“If this arrangement is not satisfactory in any way with your factory, please let us know at once, but if this is satisfactory, we wish that you would continue to supply the market with provisions until .further notification.

“Yours very truly,

“K. G. Yama

. “The Yama Merc. Co.” (Italics ours)

On the date of the written guaranty the account of plaintiffs with DeBus was $335.98. Plaintiffs continued sending DeBus goods and merchandise until April, 1942, at which time the balance due on the account was $1,184.16, the amount for which judgment was entered as above stated.

It further appears from the evidence that from its inception until the conclusion of the DeBus account it was never paid in full, and no witness testified that defendant was notified of DeBus’ default in the payment of his account every two weeks or at any stated time throughout the entire period of the account. Defendant was called as an adverse party and repeatedly stated, in words which indicated an unfamiliarity with [327]*327the English language, that he received no notice of the DeBus account from plaintiffs in accordance with the guaranty although their representative ordinarily waited on DeBus weekly for the purpose of procuring orders. When Yama was asked if he checked up every two weeks to see if the DeBus account was settled, he answered, “No; the company notified me every two weeks, or three weeks, and I thought the man was all settled.”

Defendant takes the position that the guaranty was conditional, and therefore, before liability for the payment of the DeBus account could attach to him, plaintiffs must establish that they notified him every two weeks of the condition of their account with DeBus. If we determine that the letter of February 23, 1939, is a conditional guaranty, the motion to dismiss,, interposed by defendant, was good and should have been granted because there is no competent evidence in the record showing that the notification mentioned in the guaranty was given.

It seems to be well established law that a guaranty must be strictly construed and cannot be extended. Sutton Co. v. McCullough, 64 Colo. 415, 174 Pac. 302, Wilcoxson v. McMullin, 99 Colo. 432, 63 P. [2d] 880. Generally speaking, contracts of guaranty are classified as absolute or conditional.

“An absolute guaranty is an unconditional undertaking on the part of the guarantor that the debtor will pay the debt or perform the obligation. The conditional guaranty contemplates, as a condition to liabil- ■ ity on the part of the guarantor, the happening of some contingent event other than the default of the principal debtor or the performance of some act on the part of the obligee. Where the guaranty is conditional, the obligation of the guarantor may not be enforced unless the event has occurred or the act has been performed. * * *” 24 Am. Jur., p. 885, §16.

“An absolute guaranty is one by which the guarantor [328]*328unconditionally promises payment, or performance of the principal contract on default of the principal debtor or obligor. * * *

“On the other hand, a conditional guaranty is one which is not enforceable immediately on the default of the principal debtor, but some contingency other than such default must happen, or the guarantee must take some steps, to fix the liability under the guaranty. * * *” 38 C.J.S., p. 1139, et seq., §7.

As we construe the guaranty in the instant case, it was incumbent upon plaintiffs, through their representative, to notify defendant every two weeks of the status of their account with DeBus, and this they failed to do. There may have been many reasons why defendant should insist upon this two weeks’ notice of the status of the DeBus account. Those reasons are unimportant here because the matter was one of which defendant had complete control.

When defendant entered into a contract of guaranty, it was to pay the debt of another, and he had the right to make the terms and to set forth the conditions upon which he would assume the burden of guaranteeing DeBus’ account, and if these conditions were not acceptable to plaintiffs, it was incumbent upon them to so notify defendant and relieve him of any responsibility in connection therewith. Under the plain terms of the guaranty of February 23, 1939, defendant was entitled to notice each two weeks, and it became incumbent upon plaintiffs to give this notice if they sought to enforce payment of the DeBus account from defendant.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State Ex Rel. Wagner v. AMWEST SURETY INSURANCE COMPANY
738 N.W.2d 805 (Nebraska Supreme Court, 2007)
FBS AG CREDIT, INC. v. Estate of Walker
906 F. Supp. 1427 (D. Colorado, 1995)
May v. Women's Bank, N.A.
807 P.2d 1145 (Supreme Court of Colorado, 1991)
Farber v. Green Shoe Manufacturing Co.
677 P.2d 376 (Colorado Court of Appeals, 1983)
Lee v. Vaughn
534 S.W.2d 221 (Supreme Court of Arkansas, 1976)
Northwestern Bank v. Cortner
275 So. 2d 317 (District Court of Appeal of Florida, 1973)
Gates v. American National Bank
479 P.2d 285 (Supreme Court of Colorado, 1971)
McAllister v. Pier 67, Inc.
465 P.2d 678 (Court of Appeals of Washington, 1970)
VALLEY NATIONAL BANK OF ARIZ. v. Foreign Car Rental
404 P.2d 272 (Supreme Court of Colorado, 1965)
Burkhardt v. Bank of America Et Al.
256 P.2d 234 (Supreme Court of Colorado, 1953)

Cite This Page — Counsel Stack

Bluebook (online)
165 P.2d 191, 114 Colo. 323, 1945 Colo. LEXIS 157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yama-v-sigman-colo-1945.