Title: Hayes v. American Nat. Bank of Powell

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Hayes v. American Nat. Bank of Powell1989 WY 228784 P.2d 599Case Number: 89-3Decided: 12/21/1989Supreme Court of Wyoming
Rodney J. 
HAYES, Appellant (Plaintiff)

 
 
v.

 
 
AMERICAN 
NATIONAL BANK OF POWELL, a National Banking Corporation, Appellee 
(Defendant)

 
 
Randy L. Royal, Greybull, for 
Appellant.

 
 
Ross D. Copenhaver and R. Scott 
Kath, Copenhaver, Kath & Kitchen, Powell, for 
Appellee.

 
 
Before Cardine, C.J., and Thomas, 
Urbigkit, Macy, and Golden, JJ.

 
 
Thomas, 
Justice.

 
 

[¶1.]     The asserted questions 
in this case relate to claims of genuine issues of material fact concerning the 
satisfaction of a guarantor's responsibility for the debt of another. Those 
asserted genuine issues of material fact encompass the effect of a stipulation 
entered into between the debtors and the guaranteed creditor in a Chapter 11 
Bankruptcy proceeding; an alleged mutual mistake by the guarantor and the 
creditor with respect to the extent and amount of the guarantee; and the effect 
of a satisfaction arising out of the acceptance by the creditor of personal 
property of the debtor in the absence of an appropriate valuation of that 
property. The questions are academically interesting, but we agree with the 
determination by the district court that the money in issue was used, in fact, 
to satisfy a promissory note secured by a mortgage made independently by the 
guarantor to the appellee, the American National Bank (Bank). Consequently, the 
asserted genuine issues do not involve a material fact in this instance. There 
is no genuine issue as to the material facts relating to the independent debt of 
the guarantor to the bank. We affirm the summary judgment entered by the 
district court.

 
 

[¶2.]     The appellant, Rodney 
Hayes (R. Hayes), asserts these issues in his brief:

 
 
"1. Were there genuine issues of 
material fact concerning the extent of release of liability intended by Appellee 
and Chapter 11 debtors concerning the terms of a two-year, post-confirmation 
written Stipulation entered into between the Chapter 11 debtors and Appellee, 
and the effect of that written Stipulation on the liability of a guarantor of a 
promissory note of the Chapter 11 debtors which was to be paid through the 
Chapter 11 Reorganization Plan such that it was error for the District Court to 
have ordered Summary Judgment?

 
 
"2. Was there sufficient evidence 
offered by the parties to support a showing that there was mutual mistake by the 
parties regarding the extent and amount of a guarantor's guarantee of promissory 
note due Appellee from non-party Chapter 11 debtors such that it was error for 
the District Court to grant Summary Judgment against Plaintiff and in so doing 
refuse to admit evidence of the parties' intent?

 
 
"3. When Appellee accepted delivery 
of certain items of personal property 'in full satisfaction of the creditor's 
claims against the debtors,' and where Appellee failed to provide promissory 
note guarantor, Appellant, with accounting of application of property value and 
failed to liquidate said personal property and apply the proceeds thereof to 
indebtedness allegedly due by guarantor, Appellant, were there genuine issues of 
material fact regarding reduction of indebtedness due from guarantor, Appellant, 
to Appellee by virtue of Appellee's acceptance of said personal property without 
sale or application of value to the debt, such that it was error for the 
District Court to grant Summary Judgment?"

 
 
The Bank articulates the issues 
differently, in this way:

 
 
"1. Whether the District Court 
properly granted Summary Judgment in favor of Appellee and against the Appellant 
and whether the District Court correctly determined that there were no genuine 
issues as to any material fact?

 
 
"2. Whether the Appellant should be 
estopped from asserting his claims against Appellee due to Appellant having 
received any and all benefits resulting from the Hayes/Kuzara Contract as a 
direct result of Appellee consenting to the terms and conditions outlined in 
said CONTRACT?"

 
 

[¶3.]     The circumstances as to 
which genuine issues of material fact are claimed involve at least three 
promissory notes; a mortgage by R. Hayes to the Bank; an offer to give a 
mortgage on the same land; a contract for the sale of the land that had been 
mortgaged; a Chapter 11 Bankruptcy by the father of R. Hayes, Norman Hayes (N. 
Hayes), whose debt R. Hayes had guaranteed; and negotiations and compromises 
that occurred within the bankruptcy proceeding. As a more detailed recitation of 
these events will demonstrate, all of these complex and somewhat convoluted 
facts had no effect upon the original mortgage by R. Hayes to the bank. That 
mortgage was still outstanding, and the Bank was entitled to apply the proceeds 
of the fund in issue to the satisfaction of the note secured by that mortgage. 
This was the premise upon which the District Court granted summary 
judgment.

 
 

[¶4.]     We set the stage for 
the detailed recitation of facts by recalling that a summary judgment is 
affirmed on appeal only if this court is persuaded that there are no genuine 
issues relating to any material fact and that the prevailing party is entitled 
to judgment as a matter of law. Fiscus v. Atlantic Richfield, 773 P.2d 158 (Wyo. 1989); Matter of Larsen, 770 P.2d 1089 
(Wyo. 1989); Farr v. Link, 746 P.2d 431 
(Wyo. 1987). 
Furthermore, we consider only admissible evidence, in exactly the same light as 
that in which it was presented to the district court, in assessing the existence 
of any genuine issue of material fact that might foreclose summary judgment. 
Connaghan v. Eighty-Eight Oil Company, 750 P.2d 1321 (Wyo. 1988); England v. Simmons, 728 P.2d 1137 
(Wyo. 1986). 
In this instance, this latter rule is significant because the record fails to 
substantiate some of the assertions presented in the appeal. We cannot consider 
factual recitations in briefs unless they are supported by the record. 
Contentions by the parties of what they believe occurred have no materiality 
unless they are demonstrated in the record considered by the district court in 
entering its summary judgment.

 
 

[¶5.]     Therefore, our 
assessment of this case is premised only upon the facts disclosed by the record. 
The relationship between the parties was initiated on May 19, 1980 when R. Hayes 
executed a promissory note for $ 35,000.00, in favor of the Bank, and secured 
that note by giving a mortgage on real property. The promissory note was 
extended twice by promissory notes dated June 26, 1981 and January 11, 1982. The 
record is silent with respect to any separate treatment of the mortgage and, 
consequently, the record fact is that the mortgage remained intact and without 
modification by these extensions.

 
 

[¶6.]     In September of 1983, 
R. Hayes entered into a contract to sell the mortgaged land. Conforming with the 
mortgage executed on May 19, 1980, R. Hayes sought the Bank's written approval 
of the conveyance by providing it with a copy of the agreement between himself 
and the prospective buyer. This compliance with the terms of the mortgage 
constituted an acknowledgment by R. Hayes that it then was a current 
encumbrance. The contract for the sale of land provided that all monthly 
payments by the purchaser, up to the amount of $ 30,000.00, should be made to an 
escrow agent and held for the purpose of creating a special fund with which to 
guarantee the satisfaction of the mortgage held by the bank at the time that the 
payment required by the contract for the sale of land was made in full. The 
contract for the sale of land also provided that R. Hayes was to deposit $ 
5,000.00, from the down payment by the purchaser, into this same escrow fund to 
compensate for a differential in interest rates between those on R. Hayes' 
promissory note to the bank and those on the contract for the sale of land. The 
land sale contract went on to specify that, if any amount less than $ 35,000.00 
was required to satisfy the note and mortgage held by the bank at the time final 
payment was made on the land contract, the lesser amount would be paid to the 
Bank and the balance in the escrow fund would be paid to R. Hayes. Finally, R. 
Hayes agreed to pay $ 12,042.77, representing the difference between the unpaid 
balance of the agreement and the total obligation under his mortgage, to the 
American National Bank. According to the agreement, if the mortgage were 
released in any way prior to payment in full by the purchaser under the contract 
for the sale of land, the total amount of $ 35,000.00 in the escrow fund was to 
be delivered to R. Hayes. That sum was the object of this action in the district 
court.

 
 

[¶7.]     The Bank consented to 
the contract for the sale of land by an acceptance signed by Harold Hand, then 
the president of the Bank. The transaction was accomplished between R. Hayes and 
his purchaser. Revised escrow instructions were agreed to by R. Hayes and his 
buyer pursuant to which all payments, including the $ 5,000.00 down payment, 
were forwarded directly to the Bank instead of being maintained in a separate 
escrow account until the final payment was made. Consequently, the Bank, instead 
of the first-named escrow agent, was holding all monies accruing under the land 
contract other than the down payment that was retained by R. Hayes. The land 
sale contract and correspondence relating to it, including the revised escrow 
instructions, did not allude to, make any provision for, or recognize in any way 
any other mortgage relating to R. Hayes' guarantee of a promissory note by his 
father, N. Hayes.

 
 

[¶8.]     The purchaser in the 
land sale contract made all payments as he had agreed, and the mortgage by R. 
Hayes subsequently was released by the Bank. This was in accordance with an 
acknowledgment by the Bank that it would issue a "complete, full and 
unconditional release" of the mortgage on R. Hayes' property upon full 
compliance with the terms of the contract between R. Hayes and the purchaser. 
The record does not indicate that this release, which the Bank had agreed to, 
should be affected at all by guarantees made by R. Hayes upon his father's 
promissory note.

 
 

[¶9.]     The promissory note by 
the father, N. Hayes, was executed on June 2, 1982 in the amount of $ 
116,902.46. R. Hayes guaranteed that promissory note. The guarantee was not 
limited, nor were any conditions attached to it at the time, although Harold 
Hand testified that he considered the guarantee to be valid only to the extent 
of $ 35,000.00 plus interest. There is no demonstration in the record of any 
justification for Hand's belief other than his testimony. In addition, Mr. 
Hand's testimony disclosed his understanding that the debt incurred by N. Hayes 
may have included the balance due on R. Hayes' note. That testimony, however, is 
the only evidence that R. Hayes could present in support of his contention that 
his debt had been assumed by N. Hayes' note. No documentation justifies that 
understanding and, certainly, nothing demonstrates that R. Hayes' mortgage of 
May, 1980 was satisfied or released at that time. Neither is there any evidence 
that he requested a release at the time the N. Hayes note was executed. Hand's 
testimony would not be admissible to controvert the written agreements involving 
the several parties, and the record stands that the R. Hayes note and mortgage 
survived the loan made to N. Hayes. Certainly, R. Hayes considered it to be in 
effect when he contracted to sell the mortgaged land.

 
 

[¶10.]  In September of 1982, R. Hayes addressed 
a letter to Mr. Hand at the Bank in which he advised that, for an unidentified 
purpose, he was willing to consent to mortgage the same land previously 
mortgaged to secure his promissory note, provided that any $ 35,000.00 
prepayment on this mortgage would fully release title and all encumbrances in 
regard to the land. The letter did not specify what note, if any, the mortgage 
was intended to secure, and he did not indicate whether it was to be a first or 
second mortgage. On the record, neither party attempted to eliminate any 
ambiguity or misunderstanding relating to this offer. Furthermore, there is no 
indication of a reply from the Bank or the subsequent drafting of any mortgage 
agreement in response to the letter. It simply stood as an offer that had not 
been accepted.

 
 

[¶11.]  The following spring, on or about March 
3, 1983, N. Hayes filed for relief in the bankruptcy court pursuant to Chapter 
11, and a reorganization plan was proposed and confirmed. On December 29, 1983, 
N. Hayes filed an amended plan in which he proposed, in pertinent part, that the 
Bank, with "approximately $ 130,000.00 secured by a first position on some and a 
second position on other farm equipment * * * *, shall retain its lien on the 
said personal property to the extent that it is senior to the lien of the 
Wyoming Production Credit Association, in the sum of $ 59,663.00, and shall 
release its lien [on] any other property which secures this loan, except for 
such security interests or mortgages [it] holds in property which is not 
property of the estate, the proceeds of which shall also be paid against this 
claim in accordance with the agreement between such third party." The remainder 
of the balance due on the account was to be relegated to the status of an 
unsecured claim. This proposed amended plan subsequently was confirmed by the 
bankruptcy court and, again in the absence of anything in the record to 
demonstrate otherwise, our conclusion is that any claims the Bank may have held 
against any properties or interest pledged by R. Hayes as security for N. Hayes' 
note were not released by the bankruptcy court.

 
 

[¶12.]  In December of 1985, the Bank filed suit 
against N. Hayes alleging that he had defaulted in the performance of his 
obligations under the amended reorganization plan. The following April, the 
parties in that case agreed to compromise their differences by a stipulation and 
agreement pursuant to which the Bank agreed to accept the secured farm 
equipment, in the amount of $ 59,663.00, as payment in full for N. Hayes' 
promissory note. The bankruptcy court approved that arrangement on April 2, 
1986.

 
 

[¶13.]  R. Hayes contended that the settlement of 
the action between N. Hayes and the Bank, which purported to be payment in full 
of N. Hayes' note, constituted satisfaction of the debt upon which he had 
executed his guarantee. He asserted that he was released from any further 
obligation because there was nothing remaining to guarantee and argued that the 
payments which had been made to the Bank on the contract for sale of his 
property served as collateral for his guarantee on the N. Hayes note. It 
followed for R. Hayes that, since the guarantee had been satisfied from other 
sources, the Bank was not entitled to keep the proceeds from the payments on the 
contract for the sale of land and that all monies that had been paid should be 
returned to him pursuant to the terms of the agreement between him and his 
purchaser that the Bank had accepted. The implication is clear that the validity 
of his position depended upon his debt of $ 35,000.00 having been merged into 
his father's larger note. R. Hayes then brought this action against the Bank 
seeking a refund of the money paid by his buyer pursuant to the contract for the 
sale of land.

 
 

[¶14.]  The Bank answered, asserting that 
"neither the Reorganization Plan nor the Stipulation released or discharged the 
obligation of Plaintiff as guarantor or the independent agreement and obligation 
of Plaintiff to pay to Defendant * * * * of the escrowed payments contemplated 
by the contract of sale pursuant to an agreement and revised escrow instructions 
which were made and executed on or about May 1, 1984," and the Bank 
counterclaimed for $ 12,042.77 on the basis that this amount still remained due 
under the terms of the contract. Later, the Bank filed a motion for summary 
judgment, pursuant to Rule 56, W.R.C.P., asserting the lack of any genuine issue 
of material fact and its right to judgment as a matter of law. Alter reviewing 
the submitted materials, both in support and in response, the district court 
granted the Bank's motion with respect to the plaintiff's complaint. No judgment 
was entered with respect to the counterclaim but, at oral argument on appeal, 
counsel advised this court that the counterclaim was moot.

 
 

[¶15.]  In its opinion letter in this case, the 
district court described the facts substantially as they have been outlined 
above, but it emphasized that the "Norman Hayes note did not result in a release 
of the Rodney Hayes note and mortgage originally dated May 19, 1980; * * * *." 
The court did treat in detail, in arriving at its disposition, certain questions 
of fact that R. Hayes had raised in opposition to the motion for summary 
judgment. R. Hayes has presented essentially the same questions as a basis for 
the issues on appeal. We are in accord with the treatment of those contentions 
by the district court.

 
 

[¶16.]  The first issue discussed in the district 
court, although not articulated as one of the issues for appellate review, is 
the question of whether the N. Hayes promissory note actually was due and, thus, 
in default, so as to trigger R. Hayes' guarantee. This question is attributable 
to obvious discrepancies between various copies of those documents held by the 
parties. The copies submitted by the Bank set forth a due date of January 15, 
1984, but a copy submitted by R. Hayes reflects that date as having been deleted 
and the word "demand" inserted in its place. In most instances, this discrepancy 
would structure a genuine issue of material fact having a bearing on the outcome 
of the litigation. In this instance, however, the note in question contains an 
acceleration clause triggered by bankruptcy so that the N. Hayes note became 
due, thereby invoking R. Hayes' guarantee, at the time N. Hayes filed bankruptcy 
without regard to any due date, or absence thereof, on the face of the 
instrument. The district court correctly concluded, since there is no factual 
issue as to whether, or when, N. Hayes filed bankruptcy, that any questions 
pertaining to the asserted alterations of the note were not material to the 
outcome of the action because they would have no effect on the guarantor's 
liability.

 
 

[¶17.]  The court next treated with the question 
of whether R. Hayes' letter to the Bank in which he consented to the use of his 
land for a mortgage had the effect of limiting his liability on the N. Hayes 
note to an absolute total of $ 35,000.00. This question does closely track the 
second issue presented in R. Hayes' Brief of Appellant. Construing both the 
contract and the guarantee, the district court determined, as a matter of law, 
that R. Hayes' liability was not limited and that the Bank, therefore, could 
have summary judgment with respect to this issue.

 
 

[¶18.]  On questions relating to the construction 
of a contract, the only necessity for a determination of fact arises when an 
ambiguity is present, and the question of whether an ambiguity exists is one of 
law for the court. Hensley v. Williams, 726 P.2d 90 (Wyo. 1986). It follows 
that there is no question of fact when the language in an agreement is clear and 
unambiguous. State v. Pennzoil Company, 752 P.2d 975 (Wyo. 1988); Nelson v. Nelson, 740 P.2d 939 
(Wyo. 1987); Hillman v. Raymond, 733 P.2d 605 (Wyo. 
1987). Furthermore, an agreement cannot be contradicted or construed contrary to 
the clear language encompassed in it simply on the basis of asserted extrinsic 
evidence of the subjective intent of the parties. Arnold v. Mountain West Farm Bureau Mutual 
Insurance Company, Inc., 707 P.2d 161 (Wyo. 
1985); Mountain Fuel Supply Company v. Central Engineering and Equipment 
Company, 611 P.2d 863 (Wyo. 1980); 
Shepard v. TopHatLand and 
Cattle Company, 560 P.2d 730 (Wyo. 1977). The fact that the extrinsic 
evidence is in the form of a letter, as in this case, does not inhibit the 
application of these rules.

 
 

[¶19.]  R. Hayes' guarantee is in clear and 
unambiguous terms, and it demonstrates that it was offered and accepted without 
limitation. The letter that he then wrote to Mr. Hand at the Bank, without any 
further demonstration of materiality, had no effect on the meaning and scope of 
his liability. Because that guarantee is unlimited and unconditional, and 
because we will not rewrite clear contracts under the guise of interpretation, 
Albrecht v. Zwaanshoek Holding en Financiering, B.V., 762 P.2d 1174 (Wyo. 
1988), we conclude that, as a matter of law, the Bank was entitled to summary 
judgment on this issue.

 
 

[¶20.]  In addition to the clear and unambiguous 
language of the agreement, the district court also supported its determination 
with these facts:

 
 
"1. Rodney Hayes was still indebted 
on his original note to the Defendant as extended and still secured by the 
original mortgage. It never has been suggested that the principal and interest 
on the original note were to be limited to $ 35,000.00.

 
 
"2. The [buyer's] Contract 
reaffirmed Plaintiff's understanding that there was an outstanding mortgage and 
that the indebtedness which it secured was $ 42,042.77, consisting of a $ 
35,000.00 principal and the interest accrued thereon. In the [buyer's] contract 
plaintiff agreed for the proceeds from the sale to be applied to the principal 
and interest of that $ 35,000.00 note at the conclusion of the contract unless 
the mortgage had been fully released prior to payment by [the 
purchaser]."

 
 

[¶21.]  The thrust of these latter findings 
manifests a determination that any other asserted issues of fact would not be 
material. Nevertheless, R. Hayes argued, in his Opposition to Summary Judgment, 
that a material question of fact could be found from the acceptance by the Bank 
of property at a predetermined value pursuant to its stipulation and agreement 
with N. Hayes. R. Hayes argued that, as the guarantor of the note for which the 
property was offered and accepted, he was entitled to either an appraisal of the 
property or an accounting of the proceeds from the sale of the property. He 
contended that he could not be held responsible as a guarantor until such action 
had been accomplished. This contention by R. Hayes closely parallels the third 
issue he presented in his brief on appeal. The district court dealt with that 
contention by concluding that questions regarding these allegations did not 
structure any genuine issue of material fact because their resolution could make 
no difference in the outcome of the case. The court ruled that R. Hayes was 
liable even in the absence of any appraisal or accounting.

 
 

[¶22.]  In arriving at this determination, the 
court noted first that the guarantee signed by R. Hayes provided that "the 
holder of said Note may * * * * grant any releases, compromises or indulgences 
with respect to said note or any extension or renewal thereof * * * *, all 
without notice to or consent of any of the undersigned and without affecting the 
liability of the undersigned hereunder." The court further determined that the 
exchange of the secured property valued at $ 59,663.00 for a release of 
liability was a compromise as anticipated under the guarantee and, for that 
reason, could not affect the liability of the guarantor for the remainder due on 
the guaranteed note. This contractual language also is clear and unambiguous, 
and we agree with the district court holding, as a matter of law, that there was 
no factual issue and that R. Hayes should be held to the terms of the agreement 
that he made. Pennzoil; Nelson; Hillman. R. Hayes' contention that the 
property could have been worth a great deal more than the amount attributed to 
it has no bearing on this case. R. Hayes agreed to be bound by whatever 
compromises were reached by the primary parties to the note when he furnished 
his guarantee. In any event, as the district court again pointed out in 
explaining its resolution of this issue, R. Hayes still was indebted to the Bank 
on his original note as secured by the mortgaged property sold pursuant to the 
land contract without any consideration of the accounting for the value of N. 
Hayes' property.

 
 

[¶23.]  The district court went on to state that 
"the most significant question to be addressed in this analysis is the effect of 
Paragraph 6 of the stipulation entered into between defendant [Bank] and Norman 
Hayes, providing for the transfer of certain property to the defendant in return 
for 'full satisfaction of the creditor's claims against the debtors.'" We 
interpret this dissertation as substantially the equivalent of the appellant's 
first issue on this appeal. In addressing that issue, the district court 
reviewed the various positions taken by the parties, most of which have been 
articulated above. R. Hayes' stance is that "full satisfaction of the creditor's 
claim against the debtors" means full satisfaction of the original note 
guaranteed by R. Hayes. The Bank, to the contrary, argues that the words "full 
satisfaction," when taken from the context of the N. Hayes' bankruptcy, apply 
only to the amount secured under the amended reorganization plan and did not, in 
any way, relate to the remainder of the unpaid and unsecured amount as promised 
in the original note guaranteed by R. Hayes. Furthermore, the Bank directs 
attention to language included in the amended reorganization plan specifically 
exempting "such security interests or mortgages it holds in property which is 
not property of the estate" as clearly indicating its intent to retain any right 
to collect the money paid on the land contract and to apply it to the debt. In 
response to the Bank's contention, R. Hayes urges that the language in the 
amended reorganization plan directly following this quoted language does create 
a genuine issue of material fact by presenting an inquiry as to which agreement 
is considered, the agreement between R. Hayes and his buyer, or any agreement 
between R. Hayes and N. Hayes.

 
 

[¶24.]  The district court determined that there 
was no genuine issue of material fact with respect to this question because 
there was only one agreement requiring "* * * * the proceeds of which shall also 
be paid against this claim in accordance with the agreement between such third 
party." That agreement was the one between R. Hayes and his purchaser of the 
mortgaged land which is the only one involving proceeds. We agree with that 
analysis, and we agree that there was no genuine issue of material fact with 
respect to this question. We recognize that, given circumstances different from 
those of this case, a question as to what the term "full satisfaction" 
encompasses might well be a genuine issue of material fact that would preclude 
summary judgment. In this instance, for the reasons set forth below, litigation 
of that question can have no bearing on the outcome of the case, and the 
question does not present a genuine issue of material 
fact.

 
 

[¶25.]  After critically reviewing the analysis 
by the district court, we commend the court for its astute resolution of this 
case involving an unnecessarily complex factual presentation by both parties. 
Apparently, the Bank, not completely confident of its major position, felt that 
it was necessary to respond to the theories presented by R. Hayes. We note, 
however, that one threshold issue is the only material one with respect to the 
resolution of this case. That question, as the district court noted repeatedly, 
is whether R. Hayes still was obligated on his first mortgage at the time the 
Bank refused to release the funds that had been paid to it. If R. Hayes was 
still liable on that mortgage, since the contract for the sale of land from 
which the fund was derived included terms providing for the satisfaction of the 
debt for the benefit and protection of the buyer, the Bank clearly was 
authorized to keep that money and apply it to that particular 
debt.

 
 

[¶26.]  From this perspective, any issues or 
questions pertaining to R. Hayes' guarantee of his father's promissory note, or 
his release therefrom, are truly superfluous and, therefore, not material 
because they cannot affect the outcome of the litigation. If, conversely, the 
mortgage had been released, then issues pertaining to the R. Hayes guarantee and 
its satisfaction would be material. This record does not encompass any 
sufficient admissible evidence to permit us to conclude that there was any 
question of fact as to whether the initial mortgage ever was satisfied prior to 
the Bank applying the $ 35,000.00 provided from R. Hayes and his buyer pursuant 
to their land sale contract to R. Hayes' debt to the Bank. Consequently, 
pursuant to our rules relating to the evidence that we can consider in 
appraising the propriety of a summary judgment, we conclude that R. Hayes' note 
and mortgage still were unsatisfied and that the proceeds of the land sale 
contract properly were applied only to this debt and not to satisfy R. Hayes' 
guarantee of the promissory note from N. Hayes. All issues pertaining, either 
directly or indirectly, to the guarantee by R. Hayes of his father's note, 
including those discussed in this appeal, are not material so as to preclude 
summary judgment, and the genuineness of any such issues makes no 
difference.

 
 

[¶27.]  We agree with the district court that 
this record does not present any genuine issue of material fact and that the 
American National Bank was entitled to summary judgment as a matter of law. R. 
Hayes has not sought a reversal with respect to any error in the application of 
the law, and we hold the entry of summary judgment was appropriate. The order of 
the district court granting summary judgment is affirmed.

 
 
URBIGKIT, Justice, specially 
concurring, with whom MACY, Justice joins.

 
 

[¶28.]  A complex three-party loan transaction 
involving settlement, stipulations and contentions of limited guarantee is 
resolved in this case without trial by summary judgment adopted motion. I would 
affirm the decision of the trial court but differ from the majority in reasoning 
and factual assertions. My concern partially reaches factual conflicts that may 
exist but are not relevant, but primarily statements of law with which I have 
question or open disagreement.

 
 

[¶29.]  Sequentially, the facts of this case 
include:

 
 

[¶30.]  1. May 19, 1980, appellant Rodney Hayes 
(son) obtained a $ 35,000 loan from appellee American National Bank of Powell 
(Bank) as secured by a mortgage on a 20-acre tract on the North Fork in Canyon 
Lake Estates (mortgaged property).

 
 

[¶31.]  2. June 2, 1982, Norman J. Hayes (father) 
executes a $ 116,902.46 note payable to the Bank. This note carries a reverse 
side general guarantee executed by the son.1

 
 

[¶32.]  3. September 28, 1982, son writes the 
Bank that the mortgaged property will constitute security up to $ 35,000 (on the 
father's note).2

 
 

[¶33.]  4. September 23, 1983, son sells the 
mortgaged property (Kuzara contract) and simultaneously makes a deal with the 
secured lender, the Bank, for a release of its mortgage. It is this transaction 
where the principle basis for the appeal is derived.

 
 

[¶34.]  The Kuzara contract 
provided:

 
 
d. Provided, however, that the 
SELLER agrees to deposit $ 5,000.00 of the original down payment as set forth 
above with the Security Bank in Basin, Wyoming in a special escrow fund, which, 
along with all monthly payments, shall be held by such bank until payment in 
full is made by BUYER under the terms of this Contract. At such time, if the 
mortgage at the American National Bank in Powell, Wyoming has not been fully satisfied, said 
amount shall be delivered to American National Bank in full satisfaction of the 
outstanding mortgage. The bank has agreed to the terms of this provision. 
Provided further, in the event that an amount lesser than the total of $ 
35,000.00 is necessary to clear such mortgage, said amount shall be paid to the 
American National Bank and the balance of the $ 35,000.00 shall be paid to 
Rodney Hayes. Provided further, that if the mortgage has been fully released 
previous to the payment in full by BUYER as contemplated herein, the total 
amount of $ 35,000.00 shall be delivered to Rodney Hayes upon release of such 
mortgage. If BUYER defaults under the general provisions of this Contract, the 
escrow is instructed to deliver contents of this account to 
SELLER.

 
 
* * * 
*

 
 
7. PRIOR ENCUMBRANCES. The parties 
acknowledge [sic] that the PROPERTY is subject to a prior encumbrance in the 
form of a mortgage executed by SELLER in favor of the American National Bank of 
Powell dated May 19, 1980, and recorded of Park County, Wyoming. As of September 
16, 1983, the indebtedness represented by said mortgage totals $ 42,042.77, 
being the unpaid principal balance of $ 35,000.00 plus accrued interest. In 
order to assure BUYERS that said mortgage will be paid and kept current in all 
respects, SELLER will pay $ 12,042.77 to American National Bank, which 
represents the difference between the unpaid balance of this Contract and the 
total unpaid obligation secured by said mortgage.

 
 
In addition, all of BUYERS' payments 
shall be paid into the escrow and the escrow agent shall pay the same to 
American National Bank, or obligation secured by said. Because BUYERS' payments 
will not match the payment on SELLER'S obligation due to BUYERS 10 percent 
interest rate, SELLER will escrow an additional $ 5,000.00 to cover the 
difference between SELLER'S accruing obligation and BUYER'S payments during the 
term of this Contract. The escrow agent shall draw sufficient funds from the 
escrow to pay the difference between BUYERS' payment and the payment due from 
SELLER.

 
 

[¶35.]  As a constituent part of the transaction, 
an original and then revised escrow instruction was executed providing for 
payment to the Bank by the escrow agent which latter document 
stated:

 
 
YOU ARE HEREBY AUTHORIZED to pay to 
the American National Bank of Powell the original down payment of $ 5,000.00 
deposited into escrow by Seller, together with all monthly payments of $ 322.50 
which have been deposited into the escrow account on or before the 1st day of 
each month beginning November 1, 1983. You are further authorized to forward to 
the American National Bank each monthly payment received from Buyer in 
accordance with the contract entered into by and between Buyer and Seller and 
dated the 23rd day of September, 1983, as well as the final payment due from 
Buyer on December 1, 1986.

 
 
These revised escrow instructions 
are made in consideration of and based upon the agreement of the American 
National Bank of Powell attached hereto.

 
 
The Bank concurred in writing with 
this escrow arrangement and payment process including provision, for ultimate 
release of mortgage in favor of the purchaser, Kuzara.3

 
 

[¶36.]  5. March 3, 1983, father filed a Chapter 
11 bankruptcy which, after a complex series of events and litigation, resulted 
on September 14, 1987 in his stipulation for settlement of claims with the Bank. 
It is this stipulation and settlement document which include terms of the 
bankruptcy plan which reaches back to the Kuzara contract in issue development 
to establish the argument whether the stipulation and settlement by the father 
in the bankruptcy proceeding provided a satisfaction of the $ 35,000 obligation 
originally derived from the son's loan. If the debt was released, it would then 
relate to the funds retention right of the Bank in the Kuzara sale proceeds. It 
is this consideration whether the bankruptcy plan and stipulation satisfied the 
debt involved in the Kuzara contract which presents the sole appellate issue 
with which we should be concerned.

 
 

[¶37.]  The stipulation itself did not include 
any language which directly addressed the Kuzara contract or its proceeds. The 
documentary trail reverts to the amended bankruptcy reorganization plan and 
presents inquiry whether the dealing between the Bank and the father under those 
proceedings fully satisfied4 that part of the debt for which the 
mortgaged property was security. The proviso language as an exception to the 
release clause in the reorganization plan stated:

 
 
Except for such security interests 
or mortgages i[t] holds in property which is not property of the estate, the 
proceeds of which shall also be paid against this claim in accordance with the 
agreement between such third party.

 
 
The issue is whether this proviso 
language excepted the arrangement and payment provisions in the escrowed Kuzara 
contract from settlement terms.

 
 

[¶38.]  Consequently, we have the question of an 
issue of fact or, even if there is no issue of fact as a legal result, did the 
bankruptcy settlement accomplish a satisfaction of the original indebtedness for 
the guarantor to also be released from any obligation so that he would be 
entitled to demand payment of the Kuzara contract funds to him? The trial court 
found in opinion letter and decision that "it [was] clear that the amended 
reorganization plan refer[red] to the Kuzara Contract and the funds paid 
pursuant to it." I concur in that interpretation and conclusion and do not find 
an issue of fact within this record raised to the contrary.5 Having reached the conclusion that, 
as a matter of undisputed fact the documentation which established the 
"settlement" between the Bank and the father in the bankruptcy proceeding did 
not purport to extinguish the continued liability of the son as related to the 
Kuzara contract funds, there remains the further question whether what the Bank 
did in dealing with the principal in bankruptcy without express agreement to do 
so would trigger a release of the suretyship responsibility of the 
son.

 
 

[¶39.]  In analyzing this conception, we should 
recognize the transactions for what they were, starting with the father's 
assumption of his son's obligation by inclusion in the $ 116,902.46 loan and the 
son's continued responsibility for his initial debt by both guarantee and 
mortgage pledge. Application of the very simplistic but hornbook rule that a 
discharge of a debtor in a bankruptcy proceeding does not extinguish obligations 
of guarantors resolves this issue and justifies my special concurrence in 
affirming the action of the trial court. Fortier v. DonaAnnaPlaza Partners, 747 F.2d 1324 (10th 
Cir. 1984); 11 U.S.C.A. § 524(e); 9A Am.Jur.2d Bankruptcy § 782 
(1980).

 
 
FOOTNOTES

 
 

1There are 
two copies of the note outstanding, one of which carries a term due date and the 
other with the stated date marked out and the insertion made of "demand" in 
handwriting. In my perception, this is a non-issue in this case, although if a 
material issue is presented, the fact finder would be faced with determining the 
marked out date was ineffective and, when executed, the note contained a typed 
due date.

 
 
There is a 
second non-issue which, however, I believe has considerable opportunity as 
obiter dictum to cause mischief in the law. The argument develops in discussion 
by the majority as to whether the father's Chapter 11 bankruptcy filing 
automatically accelerates an undue term note as to a guarantor 
when the note, not being due, was not in default. Not only do I find the 
question irrelevant to the holding in this case, but I expressly doubt, if not 
explicitly question, the non-determinative conclusion which, without citation of 
authority, is advanced by this majority.

 
 
The effect 
of the automatic stay on a promissory note clause providing for automatic 
acceleration upon bankruptcy is far from certain but reasonably consistent, at 
least when the payment schedule of the indebtedness is not in default. See 
Riggs National Bank of Washington, D.C. v. Perry, 729 F.2d 982 (4th Cir. 
1984); Matter of Bryant, 43 B.R. 189 (Bkrtcy.E.D.Mich. 1984); Matter 
of Rose, 21 B.R. 272 (Bkrtcy.D.N.J. 1982); In re Winters, 69 B.R. 145 
(Bkrtcy.D.Or. 1986); and In re Horton, 15 B.R. 403 (Bkrtcy.E.D.Va. 1981). 
Cf. In re Bell, 700 F.2d 1053 (6th Cir. 1983) and 
Kuney, The Bank Guaranty Agreement: The Emerging Threat of the Bankruptcy 
Stay, 41 Bus. Law. 77 (1985). Reference is also required to 11 U.S.C. § 
365(e)(1)(B) and attendant remedies concept. See also Matter of LHD Realty 
Corp., 726 F.2d 327 (7th Cir. 1984); In re Davidson Lumber Company, 
Inc., 24 B.R. 49 (Bkrtcy. S.D.Fla. 1982); Greenberg v. Fincher & Son 
Real Estate, Inc., 753 S.W.2d 506 (Tex. 1988); and In re Arrow Huss, Inc., 
51 B.R. 853 (Bkrtcy.D.Utah 1985). See 11 U.S.C. § 1123(a)(5)(G) and § 1124. It 
must be noted that none of this volume of bankruptcy literature necessarily 
determines the further question whether the debt can be accelerated as to the 
indemnitor-guarantor if the payment schedule is currently maintained when the 
principal debtor gives cause to invoke the bankruptcy filing acceleration 
clause. Presented is the ancillary question whether the guarantors or 
indemnitors have a duty exceeding a maintenance of payments on a current 
schedule for an installment obligation to also guarantee that the principal does 
not file bankruptcy even if that filing creates no adverse effect on the current 
rights of the lender.

 
 

2Out of the 
father's note and the son's guarantee and assignment of the mortgaged property 
for security, two other non-issues are created.

Considerable 
discussion at trial and recitation by this majority confuse unnecessarily 
whether the son's guarantee was limited to $ 35,000 (plus interest) or generally 
guaranteed the entire $ 116,902.46 amount. This majority attempts a factual 
disposition by resolution as a matter of law on a parol evidence basis. I do not 
agree with that as a matter of law, but the subject raises no issue presented by 
this appeal. On a legal basis, all negotiating principals agreed their intent 
was for a $ 35,000 guarantee with only a possible issue about interest on 
that $ 35,000, which was obviously due and unpaid and perhaps still due 
on the debt since origination in 1980. I reject the thesis for this academic 
argument that parol evidence denies a remedy where the participants all agree to 
the intent at the time of the execution of the document. Cordova v. 
Gosar, 719 P.2d 625 (Wyo. 1986); Western 
National Bank of Lovell v. Moncur, 624 P.2d 765 (Wyo. 1981); Arndt v. Sheridan Congregation of Jehovah's Witnesses, Inc., 429 P.2d 326 (Wyo. 
1967). Cf. Bethurem v. Hammett, 736 P.2d 1128 (Wyo. 
1987).

 
 
The subject 
is a non-issue since the Bank makes no claim against the son which exceeds the $ 
35,000 plus accrued interest. Additionally, the subject of accrued interest is 
not now present since only a partial summary judgment was entered and contended 
liability of the son for an additional payment is derived from an even later 
agreement, see event 4, infra. In considering the counterclaim for the 
purposes of the summary judgment, the trial court discerned that an issue of 
fact existed and denied relief. Consequently, there is only the original 
complaint for present appeal leaving the counterclaim undecided and the appeal 
is authenticated by a W.R.C.P. 54(b) certification that no just cause for delay 
existed.

The second 
non-issue is whether the son's $ 35,000 debt was assumed in effect by inclusion 
in the father's $ 116,902.46 note. If it made any difference, we should be able 
to rely on what the Bank's attorney told the trial court in written brief as 
consistent with trial testimony and as repeated in the brief presently before us 
for review:

 
 
3. On or 
about June 2, 1982, Norman Hayes, father of Plaintiff * * * *, executed and 
delivered to Defendant his promissory note in the amount of $ 116,902.46, which 
amount included the $ 35,000.00 debt owed by Plaintiff. Plaintiff was guarantor 
of the $ 116,902.46 note * * * *.

 
 
4. On or 
about September 28, 1982, Plaintiff by letter authorized use of the real 
property as security for $ 35,000.00 of the Norman Hayes note * * * * upon which 
Plaintiff was guarantor * * * *.

 
 
Even if we 
were to make a factual issue out of the undisputed status, it really does not 
make any difference in the case since the documentation upon which present 
appeal is based does not present a claim in excess of $ 35,000 plus interest, 
which total was clearly guaranteed by the son within any concept of the factual 
trail of this record.

 
 

3Out of this 
transaction, the unpaid $ 12,042.77 was retained for contest in the presently 
non-determined counterclaim.

 
 

4I do not 
find that "fully satisfied" is an ambiguous term either within the context of 
this case or as an empirical status of arrangements between contracting parties. 
"We are unable to find any legal definition of the word 'forgiven' as here used, 
but we construe the word as synonymous with 'cancelled,' 'discharged' or 'fully 
satisfied.'" Colorado Herald Publishing Co. v. Neuhaus, 117 Colo. 172, 184 P.2d 1011, 
1013 (1947). One of the synonyms for "satisfy" is "settle." Burton, Legal Thesaurus 
460 (1980). "Compromise" does not necessarily mean something different than 
"satisfaction." B. Gamer, A Dictionary of Modern Legal Usage 10 (1987). "Full 
satisfaction" as used in the reorganization plan and the stipulation related to 
settlement of the litigable issues in bankruptcy as claims to funds and assets 
remaining available and certainly did not determine that the original note 
executed by the father had been paid in full. See Hill v. Breeden, 53 
Wyo. 125, 79 P.2d 482 (1938).

 
 

5It is also 
absolutely clear from the record the Bank never received, and likely never will 
receive, payment in full for the total of the father's note with accrued 
interest. Undoubtedly, the deficiency was substantial, although the amount would 
not be completely determined until all of the chattels which were part of the 
repossession agreement included in the plan were liquidated and totals computed, 
including interest, accumulated costs and substantial attorney's 
fees.