Court Opinion

ID: 9657976
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:42:55.039152+00
Date Added: 2024-06-11T18:13:50.222756
License: Public Domain

MORGAN, Justice
(concurring specially).
The dissents rely heavily on Richter v. Industrial Finance Co., Inc., 88 S.D. 466, 221 N.W.2d 31 (1974) and Miners & Merchants Bank v. Comer, 82 S.D. 1, 140 N.W.2d 390 (1966), which I find to be clearly distinguishable.
In Richter, supra, the guarantor became such by operation of law; he signed certain promissory notes as such. There was no separate written contract of guaranty. To that situation, the statutory limitation of SDCL 56-1-18 would clearly apply.
In Miners & Merchants Bank, supra, the undertaking of the guarantor was endorsed on the reverse side of the promissory note, reading as follows: “For value received, I hereby guaranty the payment of the within note at maturity or at any time thereafter, and hereby agree and consent to all stipulations contained therein.” The decision turned on whether, by reason of facts pleaded by the guarantor, it was discharged or whether, as Bank claimed, it was an original and independent undertaking, not entitled to exoneration as a mere guarantor. We are not advised on what fact the trial court based its decision of exoneration, but clearly the writing signed by the guarantor was in no way comparable to the guaranty executed in this case.
In Midcontinent Broadcasting Co. v. AVA Corp., 329 N.W.2d 378 (S.D.1983), also cited by Justice Wuest, the decision involved the liability for attorney fees under the provisions of the guaranty agreement. The decision against allowing the fees actually focused on SDCL 15-17-10, which precluded attorney fees as against the principal on the note and therefore, as we held, likewise precluded fees under the guaranty agreement which constituted “other evidence of debt.”
I agree that the particular terms of the guaranty agreement in this case raise it above the language of the general statute and the prior decisions of this court.
A written guaranty of payment of the principal’s indebtedness, although collateral to the principal indebtedness guaranteed, is yet independent of it, governed by its own terms.
McAllister v. Pier 67, Inc., 1 Wash.App. 978, 465 P.2d 678, 681 (1970).
The guarantor’s promise is to perform if the principal does not_ If the principal does not perform and the other conditions precedent to liability are satisfied or excused, the promise of the guarantor becomes absolute.... The conditions precedent to liability in a guarantee contract are for the benefit of the guaran*846tor: e.g., a demand for payment, ... and the exhaustion of recourse against the principal. However, these conditions may be eliminated in the agreement itself ... or by subsequent agreement ... or waived by the party for whose benefit the condition exists.
Id. at 682 (citations omitted).
As noted in the majority opinion, the guaranty may be coextensive with, or broader or narrower than, the principal contract. 38 C.J.S. Guaranty § 43 (1943). “The nature and extent of the liability of a guarantor depends on the terms of the contract of guaranty, ... and if the terms of the contract so state, a guarantor may assume a greater liability than that of the principal.” Paul Revere Protective Life Ins. Co. v. Weis, 535 P.Supp. 379, 386 (E.D.Pa.1981) (citation omitted).
The language of the guaranty agreement clearly waived the defenses which the guarantors seek to assert herein and I agree that summary judgment was therefore properly awarded as a matter of law. I concur fully in the disposition of Issue II.