APPEAL FROM THE LA PORTE CIRCUIT COURT, The Honorable Robert S. Gettinger, Judge, Cause No. 44271-C.
Staton, J.; Shields, P.j., and Garrard, P.j., Concur.
John and Virginia Fleck (Flecks) and Thomas and Jane Hickey (Hickeys) appeal the general judgment of the trial court ordering each of them to pay Jack and Mary Ragan (Ragans) six thousand one hundred fifty-nine dollars and ninety-three cents ($6,159.93).
The Flecks and Hickeys raise three issues[Footnote 1] on this appeal, which we consolidate and restate as:
1) Whether the trial court's judgment is contrary to law and contrary to the evidence because the Flecks and Hickeys were merely accommodation parties for the Ragans.
2) Whether the trial court's judgment against the Hickeys is contrary to law and contrary to the evidence because their guaranty was not supported by consideration.
In January, 1978, Jack Ragan, David Kramer and John Fleck formed a corporation, Kramer/Ragan and Associates, Inc. The First National Bank & Trust Co. of LaPorte (Bank) agreed to extend to the new corporation a line of credit in the amount of $60,000 on the condition that the principals (Ragan, Kramer and Fleck) and their wives guarantee payment. The corporation subsequently drew down the entire $60,000.
In December, 1979 or January, 1980, Kramer left the corporation, paying Bank $20,000 in settlement of his portion of the outstanding debt. At this time, the corporation was reorganized and renamed H.F.R., Inc., with Thomas Hickey coming in as a shareholder.
On March 4, 1980, a new note was issued to H.F.R., Inc. to reflect the balance of $40,722.37 still owing after Kramer paid his share. Guaranties were signed by the principals (Ragan, Fleck and Hickey) and their wives. After several renewals of this note, a final note was issued on December 23, 1980, due March 23, 1981. The note was not paid when due and by September 28, 1981, the principal balance was $33,622.37.
At this time, Bank called the note and on October 1, 1981, sued the Ragans on their guaranty. Bank obtained an order of attachment, so when the Ragans sold their house, Bank received the proceeds to pay off the loan. The Ragans moved to add the Flecks and Hickeys as permissive parties based on the guaranties they had signed. The trial court granted the motion and subsequently entered judgment against the Flecks and the Hickeys.
Under our standard of review we presume the general judgment of the trial court is based on findings supported by the evidence. We will not weigh conflicting evidence but consider only evidence most favorable to the prevailing party. We will affirm the trial court's judgment if there is evidence of probative value that sustains the judgment. In addition, when we review a general finding of the trial court we must affirm if it is sustainable on any legal theory which is supported by the evidence. We will reverse a decision as contrary to the evidence only if the trial court's decision is not ...