Court Opinion

ID: 9469264
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:36:08.556345+00
Date Added: 2024-06-11T17:41:18.365570
License: Public Domain

GODBOLD, Chief Judge,
dissenting:
I am not able to concur in the majority opinion.
It holds that R. C. Van Lines made an agreement with White (Southern Investment) to factor R. C.’s accounts receivable pursuant to which R. C. would purchase accounts at a discount. The guaranty agreement signed by Phillips is then construed and applied in the light of this hypothesis that accounts were sold.
As the district court noted, factoring can take the form of purchasing accounts receivable at a discount or lending money using accounts receivable as security for a loan. Different rights and duties may flow from the financing provided for under one of these arrangements as opposed to the other. See UCC § 9-102(l)(b) and Comment 2. (The usual consequences can, of course, be altered by agreement.) In this instance, arguably the original transaction was for purchase of accounts at a discount while the later transactions, after the White/Shumpert interest agreements, were secured loans. And, at least on the face of the guaranty, Phillips never agreed to guarantee obligations arising out of loan transactions. Another possibility is that, although the guaranty refers to purchases, the original agreement, as illuminated by the later transactions on which interest was charged, was for a loan/collateral arrangement.
*379The district court made no finding whether the original agreement was for the type of factoring that involved sales of accounts or that involving making of loans secured by the collateral of accounts. It made no finding whether the later transactions, after White began to charge interest, were loans. We do not know what conclusion the district court would have reached with respect to the meaning and scope of the guaranty if it had found that the original arrangement was for loans/collateral dealings, or, if the original arrangement was for sales/purchase dealings, whether the later transactions, when interest began to be charged, were loans.
The majority opinion leaps over these questions by stating the guaranty is unlimited in nature. I doubt it is any broader than the underlying transactions. The phrase “perform its obligations” in the last portion of the quoted part of the guaranty appearing in the majority opinion is no broader than the underlying transactions that the guaranty protects; the nature of those transactions is equivocal and not decided by the district court.
I am not unwilling to make findings of fact on appeal when the nature of the issues, the nature of the missing facts, and the state of the record permit it. This is not such a case.
I would remand to the district court for precise findings on what the parties originally agreed to, the scope of the guaranty originally, what they agreed to subsequently, and if the arrangements were amended the effect of the guaranty as applied to them.