Citizens Security Bank (Guam) Inc v Bidaure [1997] GUSC 4; 1997 Guam 03 (20 March 1997)

IN THE SUPREME COURT
TERRITORY OF GUAM

CITIZENS SECURITY BANK (GUAM), INC.,
Appellee,

vs.

ESTER R. BIDAURE,
Appellant.

Civil Case No. CVA96-010
Filed: March 20, 1997

Cite as: 1997 Guam 3

Appeal from the Superior Court of Guam
Argued and Submitted 28 January 1997
Agana, Guam

Appearing for the Appellant
SETH FORMAN
Law Office of Keogh & Butler
Suite 105, C & A Prof. Building
251 Martyr Street
P.O. Box GZ
Agana, Guam 96932

Appearing for the Appellee
JOHN A. SPADE
Mair, Mair, Spade & Thompson
A Professional Corporation
Attorneys at Law
Suite 807, GCIC Building
414 West Soledad Avenue
Agana, Guam 96910

______________________

OPINION

BEFORE: PETER C. SIGUENZA, Chief Justice, JANET HEALY WEEKS, and MONESSA G. LUJAN, Associate Justices.

WEEKS, J.:

Appellant, Ester R. Bidaure, whose signature appears on a Continuing Guaranty for the indebtedness of M & B Construction Company, appeals from a judgment of the Superior Court, following a bench trial, in favor of Appellee Citizens Security Bank. The Superior Court, the Honorable Benjamin J.F. Cruz presiding, found Bidaure liable to Citizens Security for the balance of a defaulted loan to M & B Construction, plus interest, attorneys> fees and court costs. Appellant contends on appeal that the Continuing Guaranty at issue is unenforceable for failure of consideration. Based, however, on Appellant>s failure to adequately raise this defense at trial, we affirm the judgment of the Superior Court.

I. BACKGROUND

[1] On 27 September 1991, M & B Construction entered into a construction contract with Jose Delgado to build a two unit duplex house for Delgado for $195,000.00. The payments from Delgado to M & B Construction were to be made in installments as specified in the Construction Contract. To obtain additional funds for the Delgado project, M & B applied for a $50,000.00 loan from Citizens Security Bank. M & B>s loan application was approved by Citizens, and the funds were disbursed to M & B in a single check on 8 October 1991. Also on 8 October 1991, Antonio B. Simpao signed a promissory note on the loan to M & B in his capacity as General Manager of M & B, and also signed a Continuing Guaranty on the loan in his personal capacity. As further security for the loan, Simpao, on behalf of M & B, assigned to Citizens Security Bank M & B>s rights under the above referenced Construction Contract between M & B and Delgado.

[2] On 12 November 1991, Antonio Simpao, Manuel Alberto, and Ester Bidaure signed a document entitled AContinuing Guaranty (Relating to Past and Future Indebtedness).@ This Continuing Guaranty was for an amount not to exceed $80,000.00. According to the testimony of Simpao, the reason that the Continuing Guaranty was for a maximum amount of $80,000.00, rather than $50,000.00, is that M & B was, at the time the Continuing Guaranty was signed, in the process of applying for an additional $30,000.00 loan. (Trial Transcript, page 16, line 19.) Citizens eventually denied this additional loan request.

[3] In its closing argument at trial, Appellee Citizens addressed various issues raised by Appellant Biduare pertaining to the amount of the defaulted loan. Appellee ended its closing argument by presenting its calculation of the outstanding balance of the M & B loan as $20,700.27 in principal, and $10,834.45 in interest.

[4] Despite Appellant>s presentation of evidence challenging the amount of the defaulted loan, Appellant>s only argument at closing was that the Continuing Guaranty signed by Appellant on 12 November 1991 is unenforceable for failure of consideration. According to Appellant, the potential consideration for the Continuing Guaranty was M & B>s second loan application, the one for $30,000.00. This, according to Appellant, is why the Continuing Guaranty was for up to $80,000.00 rather than $50,000.00, the amount of M & B>s approved loan. Because the $30,000.00 loan application was denied, Appellant argued, there was no consideration given to support the Continuing Guaranty signed by Bidaure, and so nothing to bind Bidaure as a guarantor.

[5] Responding to Appellant>s closing argument, Appellee argued that, according to Simpao, the Continuing Guaranty executed on 12 November 1991 was one of the conditions of the original loan to M & B and was for any amount provided the amount does not exceed $80,000.00. The $50,000.00 loan approved and disbursed to M & B, Appellee argued, was consideration for the Continuing Guaranty, and all of the guarantors, including Bidaure are therefore responsible for the unpaid balance.

[6] Immediately following closing arguments, the trial court rendered judgment in favor of Appellee Citizens against all of the defendants, including Appellant Bidaure, for the entire outstanding balance of the M & B loan, $31,570.42. The court held an additional hearing on the issues of attorneys> fees and costs on 14 August 1996. In the court>s Judgment, filed on 22 August 1996, the court awarded attorneys’ fees in the amount of $5,236.25, and costs in the amount of $182.25. Notice of appeal was timely filed.

II. DISCUSSION