Case Name: SYSCO FOOD SERVICES, INC. v. COLEMAN
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1997-07-16
Citations: 227 Ga. App. 460
Docket Number: A97A0828
Parties: SYSCO FOOD SERVICES, INC. v. COLEMAN.
Judges: Andrews, C. J., Birdsong, P. J, Johnson and Blackburn, JJ, concur. Pope, P. J., and Ruffin, J., dissent.
Reporter: Georgia Appeals Reports
Volume: 227
Pages: 460–466

Head Matter:
A97A0828.
SYSCO FOOD SERVICES, INC. v. COLEMAN.
(489 SE2d 568)

Opinion:
Judge Harold R. Banke.
Charlton Real Estate, Inc. d/b/a Charlton Club South ("Charlton Club") purchased food and kitchen supply items from Sysco Food Services, Inc. ("Sysco"). After Charlton Club purportedly defaulted on payments due on the account, Sysco sued Teresa Coleman, alleging that she was liable under an individual personal guaranty. To its complaint, Sysco attached copies of invoices, the new account form, the terms agreement, and an individual personal guaranty. In her answer, Coleman denied signing the individual personal guaranty.
The terms agreement identifies the "purchaser" as The Charlton Club South. An individual personal guaranty form appears on the lower half of the same page as the terms agreement. It is undisputed that on this individual personal guaranty, the name of the principal debtor (_"Company") and name of the person individually guaranteeing the indebtedness are left blank.
The trial court determined that the omission of the name of the principal debtor violated the statute of frauds and made the guaranty unenforceable. The court found that the omitted information could not be supplied by parol evidence or by contemporaneous writings. Consequently, the trial court granted Coleman's motion for judgment on the pleadings.
A personal contract of guaranty must be in writing and must satisfy all of the requisites of the statute of frauds, OCGA § 13-5-30 (2). Here, the sole question is whether the writing in question, which left blank both the name of the principal debtor (_"Company") and the name of the person individually guaranteeing the indebtedness, is sufficient to satisfy the statute of frauds.
In an unbroken line of authority, this Court has consistently held that where a guaranty omits the name of the principal debtor, it is unenforceable as a matter of law. Builder's Supply Corp. v. Taylor, 164 Ga. App. 127, 128 (296 SE2d 417) (1982) (failure of document to state the identity of the entity whom guarantor agreed to indemnify is fatal). See Ellis v. Curtis-Toledo, Inc., 204 Ga. App. 704, 705 (2) (420 SE2d 756) (1992) and Northside Bldg. Supply Co. v. Foures, 201 Ga. App. 259, 260 (411 SE2d 87) (1991).
Even where the intent of the parties is manifestly obvious, where the name of the principal debtor is omitted from the document, the agreement is not enforceable because it fails to satisfy the statute of frauds. Taylor, 164 Ga. App. at 128. See Foures, 201 Ga. App. at 259 (where guaranty agreement left blank the name of the debtor, the contract is unenforceable even if omission was due to a scrivener's error). See also Ellis, 204 Ga. App. at 704 (omission of identity of principal debtor made contract of guaranty unenforceable as a matter of law).
Notwithstanding Sysco's argument to the contrary, the contemporaneous writing rule, even if applicable, would not authorize a different result. Compare Duke v. KHD Deutz &c. Corp., 221 Ga. App. 452, 453 (471 SE2d 537) (1996) (use of contemporaneous writings permitted to resolve ambiguity where statute of frauds not implicated because guaranty contained all essential terms). Although the "Terms Agreement" and "Individual Personal Guaranty" appear on the same paper, the two sections do not incorporate each other by reference or use the same terms. The terms agreement refers to "seller" (Sysco Corporation and any of its subsidiaries and affiliated entities) and "purchaser" (The Charlton Club South). In contrast, the individual personal guaranty refers to "company" (unidentified, unnamed) and "seller" (Sysco Corporation and each of its subsidiaries and affiliated entities). Compare Baker v. Jellibeans, Inc., 252 Ga. 458, 460 (1) (314 SE2d 874) (1984) (three contemporaneously executed written agreements could be construed together to determine terms and conditions of option to purchase realty).
The trial court correctly found that in order to determine the identity of the "company" debtor, it would have to make inferences and consider impermissible parol evidence. See Sawyer v. Roberts, 208 Ga. App. 870, 871 (432 SE2d 610) (1993) (parol evidence inadmissible to supply any missing essential elements of a contract required by the statute of frauds to be in writing); Taylor, 164 Ga. App. at 128. OCGA § 10-7-3 expressly prohibits the extension of a suretyship contract by implication or by interpretation.
Judicial construction of the contract of guaranty at issue is improper because this defect cannot be treated as an ambiguity. While parol evidence may be admitted to explain ambiguities in descriptions, it cannot be admitted to supply a description entirely omitted. Taylor, 164 Ga. App. at 128. Compare Murray v. Pratt-Dudley Builders Supply, 176 Ga. App. 225 (335 SE2d 443) (1985) (statute of fraud problem not created because the creditor was not seeking to enforce a guaranty made on behalf of an unnamed, unspecified debtor).
Sysco's reliance on Schroeder v. Hunter Douglas, Inc., 172 Ga. App. 897 (324 SE2d 746) (1984) is misplaced. Schroeder neither authorizes nor requires a different result. In that case, the guaranty agreement contained a clear statement of agreement and properly identified the subject matter of the debt as well as the identities of the promisee and promisor. We rejected Schroeder's contention that the contract of guaranty was unenforceable because it omitted the amount owed and the terms of payment. Inasmuch as the exact amount of the debt on an open account was not determinable at the time of the guaranty's execution, we found that the guaranty satisfied the statute of frauds. Id. at 899.
The guaranty at issue was drafted by Sysco. It was incumbent upon Sysco to ensure that all the essential terms were completed before Coleman signed the form. This Sysco failed to do. Compare Duke, 221 Ga. App. at 453 (where guaranty contained all essential terms, contemporaneous writings could be considered to resolve latent ambiguity). Nor did Sysco object to Coleman's failure to raise the statute of frauds defense in her responsive pleading as required by OCGA § 9-11-8 (c). By acquiescing to Coleman's use of this defense in the motion for judgment on the pleadings, Sysco waived any applicable objection. See Bowers v. Howell, 203 Ga. App. 636, 637 (1) (417 SE2d 392) (1992). Further, after Coleman raised the statute of frauds defense in the motion for judgment on the pleadings, nothing prevented Sysco from amending its complaint to allege some other alternative theories of recovery such as quantum meruit or unjust enrichment.
This Court has consistently treated guaranties containing latent or patent ambiguities differently from those involving the omission of an essential term required by the statute of frauds to be in writing. OCGA § 13-5-30 (2). Regardless of why the omission occurred, it rendered the purported guaranty defective and unenforceable as a matter of law. Ellis, 204 Ga. App. at 705 (2); Foures, 201 Ga. App. at 259-260; Taylor, 164 Ga. App. at 128.
In light of the statutory mandate requiring that essential terms of a promise to answer for the debt of another be in writing (OCGA § 13-5-30 (2)), the statutory bar precluding the extension of a contract of guaranty by interpretation or implication (OCGA § 10-7-3), and the binding and applicable precedent compelling that the identity of the principal debtor be provided on a guaranty, the trial court correctly granted Coleman's motion. Because the pleadings disclose that all of Sysco's complaint was premised on a guaranty which was unenforceable as a matter of law, Coleman was entitled to judgment on the pleadings. OCGA § 9-11-12 (c).
Judgment affirmed.
Andrews, C. J., Birdsong, P. J, Johnson and Blackburn, JJ, concur. Pope, P. J., and Ruffin, J., dissent.