Court Opinion

ID: 7916064
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:11:05.307527+00
Date Added: 2024-06-11T13:34:46.435210
License: Public Domain

Wedell, J.
(dissenting): A careful examination of the stipulated facts and the guaranty discloses nothing which in my opinion takes this case out of the general well-established rule laid down in the decisions relied upon by appellant and numerous other cases which might be cited.
In Coal & Lime Co. v. Construction Co., 97 Kan. 203, 154 Pac. 1012, we held:
“Third persons, such as guarantors, sureties, indorsers, and the like, secondarily liable on one of several debts, cannot control the application which either the debtor or the creditor makes of a payment, and neither the debtor nor the creditor need apply the payment in the manner most beneficial to such persons.” (Syl. ¶ 1.)
In State v. Guaranty Co., 81 Kan. 660, 106 Pac. 1040, we held:
“In running accounts where there are items of debit and credit and there has been no appropriation of payments by the parties the ordinary rule is that the first debit items are extinguished by the first credit items, but that is subject to the other rule that where a debtor owes debts, some secured and others unsecured, and neither debtor nor creditor has directed the application, the law will apply the payments on the unsecured debts.” (Syl. ¶ 5.)
These decisions are in harmony with the well-established general rule. See authorities relied upon by appellant and others cited in the majority opinion.
This case was tried upon an agreed statement of facts and the written guaranty. It thus becomes the duty of this court to determine what the admitted facts establish. (In re Estate of Wallace, 158 Kan. 633, 635, 149 P. 2d 595.) While the stipulation is not as full and complete as it might be it discloses certain facts which must be borne in mind, as follows:
Appellee, the guarantor, obtained the merchandise from appellant, the principal, on consignment. The guarantor sold the merchandise to the debtor, Russell, the filling station operator. The guarantor collected for all products sold and remitted the proceeds to appellant. His commission was paid by appellant out of the proceeds *770after they were received by appellant. In the'guaranty appellee agreed to pay punctually any and all present or future indebtedness of Russell, if Russell defaulted in making the payment for products purchased, except the first $300 of such debt. Instead of collecting the debt as it came due and making such payments punctually to appellant the guarantor permitted Russell’s indebtedness to increase until it amounted to the sum, of $1,428.74 at the time Russell quit business. That specific amount of indebtedness was confirmed by Russell in writing.
There is nothing in the stipulation to indicate the debtor was hot required to pay appellee, the guarantor, for merchandise as and when purchased. In the absence of such a stipulation the purchase price was of course due and payable at the time of purchase and Russell was therefore continuously in default of payment and the guarantor was liable for all sums of such indebtedness, present and future, except the first $300 thereof.
The actual indebtedness due at the time Russell quit business was not stipulated to be $1,428.74 minus credits which appellant might agree to allow upon the established and confirmed debt. Neither does the guaranty say the guarantor shall be liable for the payment of the indebtedness except the first $300 after deducting all credits which subsequently may be applied on the debt.
Under the stipulation appellant was under no duty or obligation to accept any merchandise or credit cards from Russell. By doing so it did, however, decrease Russell’s confirmed indebtedness and relieved appellee under his guaranty to the extent of $133.97, that being a portion of the indebtedness for which appellee would have been liable under his guaranty after the first $300 was deducted from the confirmed indebtedness. Appellee was therefore relieved of liability on the first $300 of the account in accordance with the terms of his guaranty and in addition thereto benefited to the extent of $133.97 by reason of the credits which appellant voluntarily allowed on the indebtedness. There was no direction from the debtor to apply the credits on the guaranteed portion of the debt. Under the law appellant had a right to. apply the credits as it did and appellee, the guarantor, could not compel the application of $300 thereof to that portion of the debt he had guaranteed. It was applied to the first $300 of the confirmed debt and that constituted full compliance with the guarantor’s rights under the guaranty.
Thiele, J., joins in the foregoing dissenting opinion.