No. 14387 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

OTTO STENSVAD, 

Plaintiff and Respondent, 

MINERS & MERCHANTS BANK OF 

ROUNDUP, MONTANA, 

Defendant and Appellant. 

Appeal from: District Court of the Fourteenth Judicial District, 

Honorable Robert D. McPhillips, Judge presiding. 

Counsel of Record: 

For Appellant: 

Towe, Ball, Enright & Mackey, Billings, Montana 

Gerald Neely argued, Billings, Montana 

For Respondent: 

Moses, Tolliver and Wright, Billings, Montana 

Kenneth Tolliver argued, Billings, Montana 

Submitted: June 13, 1979 

~ecided&U& 1 193 
Mr. Justice John C: Sheehy delivered the Opinion of the Court. 

Appeal is by the Miners & Merchants Bank of Roundup, 

Montana (Bank) from an order of the District Court, 14th 

Judicial District, Musselshell County, dated May 11, 1978, 

dissolving a writ of attachment levied against property of 

Otto Stensvad. The order is appealable under Rule l(b), 

The matter comes to us on an agreed record on appeal. 

It appears therefrom that on two occasions Otto Stensvad 

executed two instruments denominated "guaranty". One instrument was dated January 2, 1970 and related to borrowings made 

from the Bank by Agri-Services, Inc. The second instrument 

dated September 16, 1971 related to borrowings made by M-V 

Enterprises, Inc., M & S Cattle Feeders, L. D. Stensvad 

Cattle Company, and L. D. Stensvad as an individual. Each 

instrument contains the following pertinent language: 

It GUARANTY 

"The undersigned hereby requests the Miners & 

Merchants Bank, Roundup, Montana (herein 

called the "Bank") to give and continue to 

give (herein called the Borrower) credit, as 

the Borrower may desire and the Bank may 

grant, from time to time, . . . and in 

consideration of any credit given, the 

undersigned [Otto Stensvad] hereby absolutely 

and unconditionally guaranties prompt payment 

when due and at all times thereafter of any 

and all existing and future indebtedness. . . from the Borrower to the Bank. . . The 

undersigned [Otto Stensvad] hereby waives 

presentment, protest, notice, demand or 

action on delinquency in respect of any 

such indebtedness or liability, including 

any right to require the Bank to sue or 

otherwise enforce payment thereof. 

". . . It is agreed that the undersigned's 

liability hereunder is several and is 

inde2endent of any other guarantees at 

any time in effect with respect to all or 

any part of the Borrower's indebtedness 

to the Bank, and thatthe undersigned's 

liability hereunder may be enforced 

regardless of the existence of any such 

other guaranties." 
Each guaranty is limited to $200,000 although the 

aggregate amount of guaranty is disputed by Stensvad. 

Stensvad commenced the action in the District Court 

on November 16, 1971, by his complaint seeking exoneration 

from the said written guaranties. By answer and amended 

counterclaim, the Bank seeks judgment against Stensvad in 

the total sum of $400,000 plus attorney fees on the ground 

that the nbtes and loans of the Bank to the borrowers have 

all become due and delinquent or have become accelerated, 

due, and delinquent. On January 31, 1972, a writ of attachment was issued by the District Court in the action and levied 

upon sroperties of Otto Stensvad. On March 3, 1978, Otto 

Stensvad moved to vacate the writ of attachment on the ground, 

among others,that the attachment was not based upon a contract 

for the direct payment of a sum certain of money. On May 11, 

1978, the District Court issued its order dissolving,- 

releasing and discharging the attachment as to all properties 

upon which the levy had been made. Appeal was taken by the 

Bank and the matter comes to us in the usual course. We 

ordered the appeal to be submitted to us on briefs without oral 

argument, and the cause is now ready for decision. 

We affirm the order of the District Court dissolving 

the writ of attachment. The sole issue presented to us is 

whether the guaranties involved here are contracts for the 

direct payment of money so as to entitle the Bank to a writ of 

attachment under the Montana statutes. A guaranty, under 

Montana law, is clearly not a contract for the direct payment 

of money. 

Section 27-18-101 MCA, says that: 

" (1) Property may be attached in: 

(a) an action upon a contract, express or 

implied, for the direct payment of money. . ." 
Section 28-11-101 MCA, defines a guaranty: 

"A guaranty is a promise to answer for the 

debt, default, or miscarriage of another 

person. " 

It is firmly established in Montana law that an 

instrument of guaranty will not support the issuance of a writ 

of attachment. In General Finance Co. v. Powell (1941), 112 

Mont. 535, 540, 118 P.2d 751, 753-754, this Court said: 

"The attachment law is purely of statutory 

origin and while, like other statutes, it 

must be liberally construed to effect its 

objects (sec. 4, Rev. Codes), the courts 

have not the right under the guise of 

liberal construction to read into the 

statute any meaning which its words, 

construed according to the statutory rules, 

do not convey. To construe a statute is to 

ascertain the intent of the legislature 

(sec. 10520, Rev. Codes), and not to 

substitute the court's discretion for that 

of the legislature (sec. 10519, Rev. 

Codes). Consequently our duty is to decide 

the meaning of the legislature's words, 

construed ordinarily according to the 

context and the approved usage of the 

language (sec. 15, Rev. Codes). The 

question is sirn~ly this: Is a guaranty 

of 'the full payment of said contract 

and prompt payment of all sums due thereunder' a contract for the direct payment 

of money? 

"As pointed out by this Court in Ancient 

Order of Hibernians v. Sparrow, 29 Mont. 

132, 74 P. 197, 64 L.R.A. 128, 101 

Am.St.Rep. 563, 1 Ann.Cas. 144, the word 

'direct' first appeared in our attachment statute in 1866 and again as the 

statute was re-enacted in 1867 after the 

congressional invalidation of the 1866 

legislation (14 Stat. 427) was omitted in 

1869, and reinserted in 1895. Therefore 

there can be no doubt that the legislature 

attached some substantial meaning to the 

word. 'Direct' is defined by Webster's New 

International Dictionary (Webster-Merriam 

2d Ed.) as denoting 'the absence of any 

intervening medium or influence'; as meaning 

'marked by the absence of an intervening 

agency or influence.' Obviously defendant's 

guaranty of the purchaser's performance of the 

conditional sales contract is not a contract 

for the direct payment of money, since 

defendant's liability is conditioned entirely 

upon an intervening medium, agency or 

influence--namely, upon the purchaser's default, 

which as to eventuality, time and amount was 
entirely problematical. If it is to be 

construed as a contract for the direct 

payment of money, it is hard to imagine 

any contract for the payment of money 

which is not for its direct payment. 

"This court has long held that the term 

meant an unconditional and absolute 

obligation to pay money (Ancient Order 

of Hibernians v. Sparrow, supra; Heffron 

v. Thomas, supra; Wall v. Brookman, 72 

Mont. 228, 232 P. 774), and not a 

collateral agreement dependent or 

contingent upon some other agreement. 

Square Butte State Bank v. Ballard, 

64 Mont. 554, 210 P. 889; Gilna v. 

Barker, 78 Mont. 343, 254 P. 169. 

In the Square Butte Bank Case [64 

Mont. 554, 210 P. 8901 suit was brought 

upon defendant's contract of guaranty 

that 'for value received, I hereby 

guarantee the collection and payment 

of the within note,' and it was held 

that the guaranty, being dependent upon 

the contingency of the debtor's breach 

of another contract, was not a contract 

for the direct payment of money. In 

Wall v. Brookman, supra, this court 

went so far as to suggest that the 

elimination of the word 'direct' from 

the statute would be beneficial, but 

as the legislature has not seen fit 

to eliminate it, the CDU~-tsmay not 

overrule the legislature in order to 

do so. " 

See also Wall v. Brookman (1925), 72 Mont. 228, 232 

P. 774; Square Butte State Bank v. Ballard (1922)) 64 Mont. 

555, 210 P. 889; Butte Machinery Co. v. Carbonate Hill Mining 

Co. (1926), 75 Flont. 167, 242 P. 956; Muri v. Young (1926), 

75 Mont. 213, 245 P. 956. 

The Bank however contends that the instruments 

involved here are not instruments of guaranty, but rather of 

surety, and as such Otto Stensvad is bound with the principals 

as an original promissor on the borrowings. We cannot 

interpret the instruments before us as contracts of surety. 

Each is denominated by the Bank as a "guaranty"; each is a 

promise by Otto Stensvad to answer for the debt, default, or 

miscarriage of another person or entity. As such, each instrument is a guaranty instrument, and not a surety instrument, 
even though each provides that Stensvad's liability is "several" 

and that Stensvad waived all right to require enforcement of 

payment from the borrower. The Bank cannot escape the effect 

of the instrument with respect to Stensvad, that his liability 

is conditioned entirely upon an intervening event, that is the 

borrower's default. General Finance Co. v. Powell, supra. 

As early as 1900, in Cole Mfg. Co. v. Morton (1900), 

24 Mont. 58, 60 P. 587, this Court distinguished between a 

surety and a guaranty, pointing out that a surety is bound as 

an original obligor, while a guarantor is bound on a collateral 

promise. A surety makes himself responsible for the performance of his principal, a guarantor only agrees to answer for 

the debt, default or miscarriaqe of another. These distinctions 

are preserved in our statutes. Compare section 28-11-401 MCA 

defining surety, with section 28-11-101 MCA defining guarantor. 

When all the smoke clears in this appeal, a single 

fact stands out: Otto Stensvad is not liable under the 

instruments he executed for the Bank unless the borrowers 

defaulted to the Bank. Therefore the District Court was correct 

in ordering the writ of attachment dissolved. 

Af firmed. 

Justice 

We concur: 

......................... /hie£ Justi e 

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