Case Title: First National Bank of Hutchinson v. Kaiser

Citation: 222 Kan. 274, 564 P.2d 493

Docket Number: 48,168

State: kansas

Court: Kansas Supreme Court

Date: 1977-05-14T00:00:00Z

Document:
222 Kan. 274 (1977)
564 P.2d 493
FIRST NATIONAL BANK OF HUTCHINSON, KANSAS, Appellant,
v.
C.E. KAISER, a/k/a CONARD E. KAISER, Appellee.
No. 48,168

Supreme Court of Kansas.
Opinion filed May 14, 1977.
J. Stanley Hill, of Branine, Chalfant, Hyter & Hill, of Hutchinson, argued the cause and was on the brief for the appellant.
E. Dexter Galloway, of Hutchinson, argued the cause and was on the brief for the appellee.
The opinion of the court was delivered by
MILLER, J.:
This is an action commenced by the First National Bank of Hutchinson against C.E. Kaiser on a written contract of guaranty. After a jury trial, judgment was entered in favor of Kaiser. The bank appeals, claiming that it was entitled to judgment as a matter of law.
The guaranty reads in part as follows:
"CONTINUING GUARANTY BETWEEN THE UNDERSIGNED AND THE FIRST NATIONAL BANK OF HUTCHINSON, KANSAS
"Hutchinson, Kansas June 22, 1967
"TO THE FIRST NATIONAL BANK OF HUTCHINSON, KANSAS
.... .... .... .... ...
The bank prepared the guaranty on its form and sent it to C.E. Kaiser. He signed it on or about June 22, 1967 and returned it to the bank. The bank loaned $9,000 to Robert H. and Glenda Kaiser on note No. 6762 on August 1, 1967. That note was paid in full September 30, 1968. Thereafter, a separate loan was made by the bank to Robert H. Kaiser on December 18, 1968, in the amount of $5,740, by which time Robert and Glenda had been divorced. This later loan was evidenced by note No. 1115 signed by Robert H. Kaiser alone. That note was never fully satisfied. The bank brought suit against Robert, who responded by filing a petition for bankruptcy in the United States District Court for the Eastern District of Oklahoma. The promissory note to the bank was scheduled, and an order of discharge was entered on June 7, 1973. Shortly thereafter, on May 21, 1973, this action was filed by the bank against C.E. Kaiser on the guaranty.
The defendant answered, admitted that he executed the written guaranty, but denied that it was intended to be continuing. He alleged that the guaranty was intended only for the purpose of securing a $9,000 loan for the purchase of land by Robert and Glenda Kaiser, which loan was fully paid. Defendant contended that his obligation to the bank was fully satisfied upon payment of the real estate loan. He contended further that the written guaranty was to secure loans to Robert H. Kaiser and Glenda Kaiser and that note No. 1115, signed by Robert only, and not by Glenda, was beyond the scope and coverage of the guaranty.
Both parties moved for summary judgment, both motions were denied, and the case was tried to a jury.
*276 C.E. Kaiser, a resident of Houston, Texas, testified that he was contacted at his office by his brother, Robert, and C.W. Wilcox, a vice president of the bank, regarding his guaranteeing a $9,000 loan to Robert for the purchase of some land. Wilcox told him that his exposure was virtually nil because the land was worth as much as Robert was borrowing. C.E. Kaiser then sent his personal financial statement to his brother to be delivered to the bank. The bank sent him the guaranty to be signed, together with a cover letter explaining what the guaranty was for  to guarantee to the bank the $9,000 real estate loan being made to Robert and his wife. C.E. Kaiser signed the guaranty and returned it to the bank.
C.E. Kaiser testified that he lost the letter of transmittal sent by the bank when it mailed the guaranty to him. An officer of the bank, Forrest Smith, testified that the bank did not have a copy of its cover letter which was written when the bank prepared the guaranty agreement and mailed it to the defendant. Mr. Wilcox testified that the $9,000 limit was placed on the guaranty because that was all that was needed for 40 acres of ground which Robert Kaiser and his wife wanted to buy.
The jury returned a general verdict for the defendant, and answered special questions submitted to it as follows:
"ANSWER: Yes
"ANSWER: No
"ANSWER: No
"ANSWER: Yes"
The bank moved for judgment notwithstanding the verdict, and appeals following the overruling of that motion. The bank first contends "that the trial court erred in overruling the plaintiff's motion for summary judgment because the only genuine issue of fact was whether or not the defendant had limited the guaranty agreement by a collateral document and that the issue could be resolved as a matter of law." The bank filed supporting affidavits with its motion for summary judgment and the defendant filed an *277 affidavit in opposition. The trial court apparently overlooked or disregarded the affidavits and overruled the motion on the ground that issues were presented by the pleadings. Plaintiff calls our attention to the rule set forth in Ebert v. Mussett, 214 Kan. 62, 519 P.2d 687, where we said:
Though the trial court erred in the stated reason for its ruling, we believe its ruling was correct. As we said in Kirkpatrick v. Seneca National Bank, 213 Kan. 61, 515 P.2d 781:
Defendant contended that there was an agreement between the parties by which the guaranty was limited to the single real estate loan, and that the bank's concomitant letter of transmittal set forth that understanding.
Where two instruments are executed by the same parties at or near the same time in the course of the same transaction, and concerning the same subject matter, they will be read and construed together. Amortibanc Investment Co. v. Jehan, 220 Kan. 33, 551 P.2d 918; Place v. Place, 207 Kan. 734, 486 P.2d 1354; Skinner v. Skinner, 126 Kan. 601, 270 Pac. 594. And to the same effect, see 17 Am.Jur.2d, Contracts, sec. 264, p. 670, where it is said:
The cover letter was lost; neither party located it. The defendant was entitled to attempt to establish the contents of the lost letter pursuant to K.S.A. 60-467. Whether the guaranty was limited by a concurrent agreement of the parties, expressed in plaintiff's cover letter, was thus an issue of fact which could not be resolved as a matter of law, and thus the trial court properly overruled the bank's motion for summary judgment.
We are not unmindful of the rule that when a contract is complete, unambiguous and free from uncertainty, parol evidence of prior or contemporaneous agreements or understandings *278 tending to vary the terms of the contract evidenced by the writing is inadmissible. Davenport v. Dickson, 211 Kan. 306, 312, 313, 507 P.2d 301. As we said in Failing Co. v. Cardwell Investment Co., 190 Kan. 509, 376 P.2d 892:
Determining whether a written contract is free from ambiguity is a judicial function. Craig v. Hamilton, 213 Kan. 665, 518 P.2d 539. In the case at bar, the trial court allowed evidence to be introduced on the issues of whether the guaranty applied to the joint debts of Robert and Glenda, or to the severable debts of Robert alone, and whether the $9,000 limit expressed in the contract of guaranty was a limitation of the guaranty to the real estate loan in that amount. The court thus implicitly ruled that the contract was not free from ambiguity in those respects.
The guaranty designated Robert H. Kaiser and Glenda Kaiser as the "borrower." A case much cited in the law of guaranty holds that a guaranty covering loans to be made in the future to five persons does not cover future loans made to but four of the five persons named. Hamilton Trust Company v. Shevlin, 141 N.Y.S. 232, 156 App. Div. 307, aff'd 109 N.E. 1077, 215 N.Y. 735. And it is said that the guarantor of obligations of a joint enterprise is not liable except for advancements made jointly to the principals who are named in the instrument. Feinsinger, The Law of Suretyship, sec. 54, p. 65. The rule is set forth in 38 C.J.S., Guaranty, sec. 51, p. 1204 as follows:
The trial court here determined that whether the guaranty was intended to cover loans to the named individuals separately was a question of fact to be determined by the jury. Upon the record before us we cannot say that this was error. Plaintiff's final point is that the trial court erred in overruling plaintiff's motion for judgment notwithstanding the verdict because the undisputed evidence showed that the bank was entitled to judgment as a matter of law. We do not agree.
*279 The issues of fact were fully tried, and were resolved by the jury. The evidence was sufficient to support the jury's answers to the special questions and its general verdict. We find no error.
The judgment is affirmed.