One Stop Supply, Inc. v. Ransdell

Facts

Ransdell (D) was president of Ransdell Air Conditioning and Plumbing and Heating, Inc. He held that position since 1979. In April of 1987, he sought a line of credit from One Stop Supply, Inc. (P). D filled out a double-sided, one-page pre-printed credit application provided by P. On the back of the application above the signature line, was a guarantee clause relating to the liability of the undersigned. D signed the clause as the president of his company. When P got the application, it checked the references for D personally and his company. The credit manager of P signed the document on April 22, 1987, and approved a $2,500 per month amount. The credit line was increased to $10,000 per month in March 1988. D used the line extensively purchasing as much as $21,000 per month. Bills were paid in a timely manner until the Summer of 1988. On September 19, 1988, D placed his company in Chapter 7 Bankruptcy. At the time of his filing, D’s company-owned P about $48,000. On May 29, 1990, P sued D individually for $48,631.39 plus attorney fees and interest claiming he was obligated under the personal guaranty clause listed in the credit application. At trial, D argued that the language in the credit application was never brought to his attention and that he was not aware he would be liable for the debts of his company. D relies heavily on the Parton case where we found that that plaintiff’s signature on a car dealer’s work order did not constitute a waiver of his rights to hold the dealer liable for negligence. We acted in that case in part because the waiver provision was never brought to the attention of the signatory, was inconspicuously placed on the document and was difficult for a layperson to understand. The trial court found that D’s signature did not bind him personally with language and reasoning that closely follows the opinions in the cases cited by D. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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