R.B. Cronland Building Supplies, Inc. v. Sneed
R.B. Cronland Building Supplies, Inc. v. Sneed
Opinion of the Court
This appeal arises from a partial grant of summary judgment in an action by Plaintiff, R.B. Cronland Building Supplies, to recover a debt allegedly owed by Defendants Leon Sneed (a building general contractor), and his wife, Betsy Sneed. We affirm in part and dismiss in part.
Preliminarily, we note that although the record appears to reflect an issue as to whether this appeal is interlocutory, we accept the trial court’s certification under Rule 54 that this matter is ripe for review. Accordingly, we will address the merits of Betsy Sneed’s appeal. However, Cronland Building Supplies’ attempt to appeal from the denial of summary judgment on its claim against Leon Sneed is clearly interlocutory; accordingly, we summarily dismiss that part of the appeal. Thus, we review only the merits of the appeal from the grant of summary judgment in favor of Betsy Sneed.
Regarding the appeal against Betsy Sneed, the record in this case shows that under an undated document entitled “Conditions of Credit Guaranty of Payment,” Leon Sneed and his wife, Betsy Sneed signed
First, the record shows that Cronland Building Supplies sued Betsy Sneed only as a principal debtor, alleging that she had primary liability for a debt owed to Cronland Building Supplies based upon the alleged contract. However, in this case, Cronland Building Supplies failed to produce evidence that Betsy Sneed ever executed as a principal debtor.
Second, Cronland Building Supplies argues that Betsy Sneed is liable as a guarantor of her husband’s debt. However, the complaint alleges an action against Betsy Sneed as a debtor, not a guarantor. It is well established that “[guarantors are not sureties; nor are they endorsers, . . . [t]he obligation of a surety is primary, while that of a guarantor is collateral.” Trust Co. v. Clifton, 203 N.C. 483, 485, 166 S.E. 334, 335 (1932) (citation omitted). Thus, “[a] surety may be sued as a promisor with the principal debtor; a guarantor may not; his contract must be especially set forth or pleaded.” Id. See also Credit Corp. v. Wilson, 12 N.C. App. 481, 486, 183 S.E.2d 859, 862 (1971) (holding that “Defendant’s contract of guaranty is their own separate contract with plaintiff to pay the debts of [debtor] when due, if not paid by [debtor]. They are not in any sense parties to the note executed by [debtor]”). Since Cronland Building Supplies’ complaint neither alleges that Betsy Sneed was a guarantor of her husband’s debt nor specifically pleads or sets out a valid guaranty contract, summary judgment was appropriately entered on behalf of Betsy Sneed on this issue.
“A guaranty of payment is an absolute promise by the guarantor to pay the debt at maturity if it is not paid by the principal debtor. The obligation of the guarantor is separate and independent of the obligation of the principal debtor, and the creditor’s cause of action against the guarantor ripens immediately upon failure of the principal debtor to pay the debt at maturity.” Credit Corp. v. Wilson, 281 N.C. 140, 145, 187 S.E.2d 752, 755 (1972) (citation omitted). Thus, rights against guarantors arise out of the guaranty contract and must be based on that contract. “Such an action is not a suit on the primary obligation which the guaranty contract secures, and the guarantor is not liable except under the terms of the guaranty contract.” Id. (citation omitted).
In this case, Cronland Building Supplies argues that the 1994 document was a guaranty contract under whose terms Betsy Sneed is liable as a guarantor of her husband’s debt. However, the contract fails to identify a debtor and does not contain the signature of a debtor. As such, that document does not constitute a valid guaranty contract.
Moreover, to be enforceable, a guaranty contract must be in writing. N.C.G.S. § 22-1 (2001). Therefore, Cronland Building Supplies’ alleged oral “explanations” to defendant of her liability as guarantor do not create an enforceable contract. See Smith v. Joyce, 214 N.C. 602, 604, 200 S.E. 431, 433 (1939) (holding “to constitute an enforceable contract within the statute of frauds, the written memorandum, though it may be informal, must be sufficiently definite to show the essential elements of a valid contract”).
Furthermore, we hold that Cronland Building Supplies’ affidavit is not admissible to supply elements missing from the 1994 document. A guaranty contract is subject to the parol evidence rule which “prohibits the consideration of evidence as to anything which happened
In sum, we uphold the trial court’s entry of summary judgment for Betsy Sneed. Additionally, we dismiss Cronland Building Supplies’ attempt to appeal from the trial court’s denial of summary judgment on its claims against Leon Sneed as interlocutory.
Affirmed in part, dismissed in part.
. “[T]he party moving for summary judgment ultimately has the burden of establishing the lack of any triable issue of fact.” Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985). However, “[o]nce the party seeking summary judgment makes the required showing, the burden shifts to the nonmoving party to produce a forecast of evidence demonstrating specific facts, as opposed to allegations, showing that he can at least establish a prima facie case at trial.” Gaunt v. Pittaway, 139 N.C. App. 778, 784-85, 534 S.E.2d 660, 664 (2000) (citations omitted).
Reference
- Full Case Name
- R.B. CRONLAND BUILDING SUPPLIES, INC. v. LEON J. SNEED and wife, BETSY SNEED v. JAMES J. MAUNEY, JR. and wife, MELISSA H. MAUNEY, Third-Party
- Cited By
- 2 cases
- Status
- Published