Opinion ID: 654607
Heading Depth: 2
Heading Rank: 2

Heading: Enforceability of the Oral Guaranty

Text: 24 Even as we agree with the bankruptcy and district courts that Fairchild's fuel payments produced reasonably equivalent value by ensuring Air Kentucky's continued operation, we also agree that such function ceased on May 31, 1989. Thus, Fairchild could only claim receipt of value for payments made after May 31 if those payments were made to reduce a legally enforceable debt. 15 25 Butler does not dispute on appeal that it only acquired an oral guaranty from Fairchild, and that an oral guaranty is generally unenforceable under the Texas statutory version of the common law Statute of Frauds. 16 Instead, Butler attempts to find enforceability for this oral guaranty by fitting it within either of two doctrinal exceptions: main purpose or part performance. 26
27 Under Texas law, an oral guaranty may be enforced if it falls within the main purpose doctrine. An oral guaranty falls within this doctrine if: 28 1) The promisor intended to become primarily liable for the debt, in effect making it his original obligation, rather than to become a surety for another; 29 2) There was consideration for the promise; and 30 3) Receipt of the consideration was the promisor's main purpose or leading object in making the promise; that is, the consideration given for the promise was primarily for the promisor's own use and benefit. 17 31 In the instant case, the bankruptcy court found that Fairchild was not primarily liable on the debt--thus rendering the main purpose doctrine inapplicable. The district court concluded that this finding was not clearly erroneous. 32 Like the district court, we review the bankruptcy court's finding on this issue only for clear error. 18 A finding of fact is clearly erroneous 'when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'  19 And the clearly erroneous rule should be strictly applied when, as here, a district court has affirmed factual findings of a bankruptcy court. 20 33 We too conclude that the bankruptcy court did not clearly err in finding that Fairchild was not the primary obligor on the fuel contract with Butler, even though the evidence on this issue is equivocal at best. For example, although Butler's president, Comeau, testified that Fairchild was primarily responsible for the debt, several of Butler's internal documents indicate that payments were to be made by Air Kentucky. George Williamson, the Chief Financial Officer of Fairchild, testified that a letter stating that Butler is looking for reimbursement from Air Kentucky reflected his understanding of the agreement between Fairchild and Butler; he also testified that there was never any question in his mind that Air Kentucky was the account debtor. In contrast, the record discloses that the fuel bills were sent directly to Fairchild for payment. Finally, we must note (as did the bankruptcy court) that the direct consideration received for the oral guaranty was fuel delivered to Air Kentucky for its use, not Fairchild's use--a fact that, under standard commercial practices, militates against finding Fairchild as the primary obligor. When considered in toto, though, we find that there was sufficient evidence to immunize the fact finding of the bankruptcy court from reversal as clear error. 34
35 The district court concluded that Butler waived any appeal to the part performance doctrine by failing properly to present this issue first to the bankruptcy court. 21 In contending that the district court erred in finding waiver, Butler asserts that it did raise this doctrine in a response to a motion for summary judgment. According to Butler, this doctrine was presented by implication through the cases Butler cited to the bankruptcy court in connection with that motion. We find Butler's argument too thin to bear the weight of its contention. 36 Citing cases that may contain a useful argument is simply inadequate to preserve that argument for appeal; to be preserved, an argument must be pressed, and not merely intimated. 22 In short, the argument must be raised to such a degree that the trial court may rule on it 23 --a standard that clearly was not met in the instant case. The argument here was not even identified by name, much less advocated. 37 Butler's case-cite-as-argument rationale is even more dubious when viewed in the context within which the case citations were made. Butler cited these cases in connection with its advocacy of the theory that full performance by the parties took this oral guaranty out of the Statute of Frauds and thus made it enforceable. That full performance removes an agreement from the aegis of the Statute of Frauds is true. 24 But this maxim is not relevant to the issue at hand. Rather, the bankruptcy court had to determine whether the oral guaranty was enforceable at the time the payments were made to determine whether those payments constituted reasonably equivalent value under Sec. 548. Butler's misdirected appeal to a doctrine applicable only after those payments were made could hardly have provided the bankruptcy court with notice that Butler intended to invoke the part performance doctrine--one that, as noted, applies when ascertaining enforceability of the guaranty at the time those payments were made. 25 III