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Beck v. White Pass Alaska (12/31/92), 843 P 2d 1229
Notice: This is subject to formal
correction before publication in the Pacific
Reporter. Readers are requested to bring
typographical or other formal errors to the
attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
LAURENCE F. BECK, )
) Supreme Court File No.
Appellant, ) S-4899
) Superior Court File No.
v. ) 1JU-91-881 Civil
HAINES TERMINAL AND HIGHWAY ) O P I N I O N
COMPANY, INC., an Alaska )
corporation doing business as )
WHITE PASS ALASKA, ) [No. 3914 -
) December 31, 1992]
Appeal from the Superior Court of the
State of Alaska, First Judicial District,
Juneau, Larry R. Weeks, Judge.
Appearances: Jeffrey W. Bush, Birch,
Horton, Bittner & Cherot, Juneau, for
Appellant. William G. Ruddy, Ruddy, Bradley
& Kolkhorst, Juneau, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
This dispute arises from a guaranty agreement between
Haines Terminal & Highway Co. (White Pass) and Laurence F. Beck.
Beck guaranteed the debts of Chilkoot Lumber Co., Inc., for whom
he worked as general manager. Beck appeals the superior court's
grant of summary judgment in favor of White Pass. We affirm.
I. FACTS AND PROCEEDINGS
Chilkoot Lumber started operating in Haines, Alaska
during the spring of 1987. White Pass was a local fuel
distributor. As Chilkoot Lumber's general manager, Beck
requested an account be established with White Pass for petroleum
products delivery. White Pass provided a two page application,
which Beck's bookkeeper completed. Beck then signed the forms,
using his signature with the caption, "General Manager." The
first page was a credit application for Chilkoot Lumber. On this
page, Beck requested a $10,000 "maximum monthly credit limit"for
The second page was a "Joint Personal Guaranty."1 Beck
did not read the guaranty, and alleged he would not have signed
it had he done so. Beck alleged that White Pass neither
requested nor relied upon his signature. He also alleged he
signed the form in his capacity as general manager, not as an
After White Pass approved the credit application, it
sold fuel and petroleum products to Chilkoot Lumber. During some
months, credit sales exceeded the $10,000 limit. Eventually,
Chilkoot Lumber ran into financial difficulties and stopped
White Pass sued Chilkoot Lumber and Beck as guarantor
for $139,162.26. The superior court awarded summary judgment to
White Pass for that amount on November 13, 1991. Beck appeals
the grant of summary judgment.2
II. STANDARD OF REVIEW
In reviewing a grant of summary judgment, we must
determine whether there exists a genuine issue of material fact
and whether the moving party is entitled to judgment as a matter
of law. Thorstenson v. ARCO Alaska, Inc., 780 P.2d 371, 374
(Alaska 1989). If the moving party establishes prima facie that
it is entitled to judgment as a matter of law, the party opposing
summary judgment must demonstrate that there exists a genuine
issue of material fact to be litigated. Id. We view the facts
in the way most favorable to the appellant. Loyal Order of the
Moose v. International Fidelity Ins. Co., 797 P.2d 622, 628
Beck argues his personal guaranty was
unenforceable because White Pass neither requested nor relied on
it in extending Chilkoot Lumber credit. As the superior court
correctly noted, "no Alaska cases . . . hold, or even mention,
reliance as a requirement for the validity of personal
guarantees." We decline to adopt a reliance requirement where
the guaranty and the underlying extension of credit were
contemporaneous. Requiring a creditor to prove reliance, in
addition to the existence of a valid contract, is unduly
burdensome and serves no valid purpose.
B. Corporate Designation after Signature
Beck argues that summary judgment was inappropriate
because the designation "General Manager"after his signature
made the guaranty agreement ambiguous. He further argues that he
intended to sign the guaranty in his corporate capacity and
should not be held individually liable. We disagree.
We have not decided previously whether a signature
followed by a corporate designation on a personal guaranty
creates an ambiguity, necessitating consideration of extrinsic
evidence. In other jurisdictions, authority is split. See Gary
D. Spivey, Annotation, Admissibility of Parol Evidence to Show
Whether Guaranty of Corporation's Obligation Was Signed in
Officer's Representative or Individual Capacity, 70 A.L.R.3d 1276
(1976). We adopt the line of reasoning that holds:
[w]here a writing in the nature of a
contract is signed by a person, and contains
apt words to bind him personally, the fact
that to such signature is added such words as
`trustee,' `agent,' `treasurer,' `president,'
and the like does not change the character of
the person so signing, but is considered as
merely descriptive of him. . . . The mere
fact that a person sustains an agency
relation to another does not prevent him from
becoming personally liable on a contract with
a third person, and, if it appears from the
contract that he pledged his own credit or
bound himself personally, the addition of
such words as `president' and the like will
be considered as mere descriptio personae.
Ricker v. B-W Acceptance Corp., 349 F.2d 892, 894 (10th Cir.
1965) (quoting Ellis v. Stone, 158 P. 480, 483 (N.M. 1916)); see
also 2 Jaeger, Williston on Contracts 299 at 393-94.
The rationale for this approach is sound. "Under
normal circumstances, a written collateral undertaking given to
secure a corporate debt will be rendered meaningless if the
primary debtor is found to be the sole party liable thereunder."
Dann v. Team Bank, 788 S.W.2d 182, 184 (Tex. App. 1990).
The agreement states that Beck "personally guarantee[d]
. . . the payment . . . of any obligation of [Chilkoot Lumber]
. . . whenever [Chilkoot Lumber] shall fail to pay." Unless Beck
is individually liable, the guaranty is illusory. Therefore, we
hold that the designation "General Manager" after Beck's
signature was merely descriptive language. Beck's subjective
intent in signing the guaranty is irrelevant.
C. Liability Limitation
The final issue is whether the $10,000 "maximum monthly
credit limit"on the credit application limits Beck's liability
under the guaranty.3 We hold that it does not.
Where the contract between the guarantee
and principal debtor limits the obligation of
the former to extend credit to the latter up
to a specified amount, such limitation does
not modify or condition the contract by which
the guarantor agrees to guarantee the payment
of all credits extended to the debtor, and
the liability of the guarantor is not limited
to such amount or discharged by the extension
of more credit than the amount so specified.
Missouri Farmers Ass'n, Inc. v. Coleman, 676 S.W.2d 855, 858 n.1
(Mo. App. 1984) (quoting 38 C.J.S. Guaranty 56 at 1211).
In the guaranty, Beck agreed "to pay White Pass on
demand any sum which may become due to White Pass by the company
whenever the company shall fail to pay the same." (Emphasis
added). The guaranty does not mention the credit application's
$10,000 monthly limit. Beck waived any right he may have had to
limit his liability by consenting to "any modification or renewal
of the credit agreement hereby guaranteed."
1. The text of the guaranty reads:
WE Laurence F. Beck AND ________
RESIDING AT Haines, Alaska, FOR AND IN
CONSIDERATION OF YOUR EXTENDING AT OUR
REQUEST CREDIT TO Chilkoot Lbr., Co., Inc.
(HEREINAFTER REFERRED TO AS "THE COMPANY"),
HEREBY PERSONALLY GUARANTEE TO WHITE PASS THE
PAYMENT AT SKAGWAY, ALASKA OF ANY OBLIGATION
OF THE COMPANY AND WE HEREBY AGREE TO BIND
OURSELVES TO PAY WHITE PASS ON DEMAND ANY SUM
WHICH MAY BECOME DUE TO WHITE PASS BY THE
COMPANY WHENEVER THE COMPANY SHALL FAIL TO
PAY THE SAME. IT IS UNDERSTOOD THA [sic]
THIS GUARANTEE SHALL BE CONTINUING AND
IRREVOCABLE. WE DO HEREBY WAIVE NOTICE OF
DEFAULT NON PAYMENT AND NOTICE THEREOF AND
CONSENT TO ANY MODIFICATION OR RENEWAL OF THE
CREDIT AGREEMENT HEREBY GUARANTEED.
SIGNATURE L.F. Beck
2. Chilkoot Lumber has not appealed the summary judgment
decision against it.
3. Beck also disputes the interpretation of the $10,000
limit. Because we hold the limit does not apply to the guaranty
agreement, we need not decide this issue.