Court Opinion

ID: 6550408
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:24:34.244104+00
Date Added: 2024-06-11T15:56:05.595133
License: Public Domain

Tom Glaze, Judge, dissenting. The majority decision in this case is a clear rejection of the tenets applicable to a guarantor’s liability which this court followed in the recent case of Moore v. First National Bank of Hot Springs, 3 Ark. App. 146, 623 S.W.2d 530 (1981). In Moore, the majority court adhered to the established rule long followed by our Supreme Court that a guarantor is entitled to have his undertaking strictly construed and that he cannot be held liable beyond the strict terms of his contract. Citing the case of National Bank of Eastern Arkansas v. Collins, 236 Ark. 822, 370 S.W.2d 91 (1963), we stated the rule as follows: A guarantor, like a surety, is a favorite of the law, and his liability is not to be extended by implication beyond the express terms of the agreement or its plain intent. Moore v. First National Bank of Hot Springs, 3 Ark. App. at 150, 623 S.W.2d at 533. The Supreme Court’s adoption of the rule that requires a strict construction of a guarantor’s obligation is consistent with Arkansas contract law that requires any ambiguity in a contract to be construed against the one who prepared the instrument. See Barton v. Perryman, 265 Ark. 228, 577 S.W.2d 596 (1979). In the instant case, the majority court recognized that the trial judge admitted parol evidence in an effort to determine the meaning of the terms “to the extent of $6,727.27” inserted in the guarantee agreement. Undoubtedly, those terms were ambiguous; yet the majority, by its opinion, has sanctioned the trial court’s construction of terms against the guarantor instead of the Bank which prepared the agreement. Because I am of the strenuous opinion that the majority court’s decision is contrary to well-established guarantor and contract law, I dissent.