Opinion ID: 1184768
Heading Depth: 1
Heading Rank: 2

Heading: The Christensen's Guarantee

Text: The theory of recovery Interiors and Action asserted against the Christensens is based on a guarantee executed by Roy E. Christensen in connection with the master lease between Navalco and Green Acres. That guarantee provides: In consideration of Landlord's remodeling the existing building at a cost not to exceed One Hundred Thousand and no/100 Dollars ($100,000.00), Roy E. Christensen, his heirs, his distributees, executors, administrators and legal representatives do hereby agree to personally guarantee the payment required to amortize the improvements as specified by Tenant. Date: 1/24/75 /s/ ______________________ Roy E. Christensen [unsigned] ________________ Carol M. Christensen Roy E. Christensen also guarantees the performance by tenants of its obligations under this lease; provided, however, that such guarantee shall expire as soon as tenant has received an aggregate of $100,000 in capital and surplus through the sale of its stock. /s/ _______________________ Roy E. Christensen [unsigned] ________________ Carol M. Christensen Interiors and Action argue that they were entitled to rely on this guarantee for ultimate payment by the Christensens for the improvements made in case Hungry Hawaiian failed to pay. The district court ruled that (1) defendant Carol M. Christensen did not sign the guarantee and therefore could not be bound by it, (2) the guarantee was special because it ran to Navalco only and not the public in general, and (3) the second part of the guarantee had expired by its own terms prior to any work having been commenced on the Hungry Hawaiian portion of the building. The Christensens submitted an affidavit in support of their motion to dismiss. The affidavit, which was unopposed by Interiors and Action, stated that Christensens' only interest in the Green Acres building was as stockholders in Green Acres of America, Inc., and that they had not entered into a lease or other agreement with Hungry Hawaiian or in any way consented to improvements made at the instance of Hungry Hawaiian. An additional affidavit by Mark Sumsion, Secretary of Green Acres, stated that prior to February 25, 1978, the date the first work was done by Interiors and Action, Green Acres had an aggregate in capital and surplus in excess of $100,000. We are obliged to accept the statements in the affidavits as true. Interiors and Action maintain that, even though Carol Christensen did not sign the guarantee, there is an issue of fact whether she become an agent for her husband, and he for her, so that she could be held liable on the guarantee even though she did not sign it. Although such a mutual agency may arise under some circumstances, we need not rule on that issue here because the second and third conclusions of the district court concerning the guarantee here are clearly correct. General and special guarantees were defined in Burkhardt v. Bank of America Nat. Trust & Sav. Assoc., 127 Colo. 251, 255-56, 256 P.2d 234, 236 (1953) as follows: There are various kinds of guaranties; however, they generally fall into one of two classifications, that is, general or special. A general guaranty is such that it may be accepted by the public generally and according to its written terms; anyone to whom it is presented may enforce or comply with its terms and the liability of the guarantor attaches. A special guaranty is addressed to a particular person, who alone may have the benefits thereof and to whom the guarantor only is liable....       The liability of the guarantor is not to be extended by implication beyond the express limits or terms of the instrument, or its plain intent... . See also Finance America Private Brands, Inc. v. Harvey E. Hall, Inc., Del.Super., 380 A.2d 1377 (1977); Periman v. Rogers, 187 Ark. 565, 61 S.W.2d 59 (1933). Although the first guarantee did not specifically name Navalco, it is clear that the reference to the landlord meant Navalco. Therefore, on the definition stated above, the guarantee was clearly special, and Action and Interiors are not entitled to any benefit from that guarantee. Furthermore, Action and Interiors cannot rely on the second guarantee. Prior to the commencement of any work by either of them, Green Acres had an aggregate of $100,000 of capital through the sale of stock. This extinguished the obligation created by the guarantee under the explicit terms of the guarantee. The trial court correctly concluded that there were no material issues of fact and that the Christensens were entitled to judgment as a matter of law.