Royal Banks of Missouri 1 (“bank”) appeals from an adverse judgment on its petition to enforce a guaranty by Respondent Harold L. Fridkin (“Fridkin”).
In the fall of 1984 Respondent Fridkin was a leading backer of Kenneth Rothman, then in the final days of his bid for governor. Respondent agreed to raise $50,-000.00, which he accomplished by obtaining guaranties from several supporters totaling $50,000.00. Respondent personally agreed to guarantee $10,000.00, by a written “Guaranty” providing in part:
FOR VALUE RECEIVED, The undersigned (Guarantor) hereby absolutely and unconditionally guarantees to Citizens Bank of University City, a Missouri Corp. (Bank), the prompt payment when due, in accordance with its terms, of the indebtedness evidenced by that promissory *361 note of FRIENDS OF KEN ROTHMAN (Borrower) dated Oct. 29, 1984, ⅛ the principal sum of Ten Thousand and 00/ 100 dollars ($10,000.00), or any renewals or extensions thereof.
The borrower and date were typed on the guaranty form as were the names and addresses of seven individual guarantors. Respondent Fridkin’s guaranty reflected his signature, with the remaining six signature lines blank. In the spaces for the princiрal sum of the promissory note, Respondent Fridkin wrote the words and figures “Ten thousand and 00/100” and “$10,-000.00”.
Other guaranties are not at issue in this case, though this case is an “example case” for liability on the other guaranties. The guarаntors, not wanting joint and several liability in the amount of $50,000.00, instructed Respondent to limit their individual liability.
The main transaction was structured in the form of a promissory note signed by Geri Rothman on behalf of “Friends of Ken Rothman”, a committeе 2 promoting Roth-man’s candidacy for governor. The note, in the principal amount of $50,000.00, dated October 29, 1984, was due on April 29, 1985, or upon earlier demand.
The guaranties were delivered to the bank on October 30, 1984, the dаy following execution of the promissory note. The bank paid the money in two installments— $25,000.00 on October 29 and $25,000.00 on November 5. Respondent Fridkin- apparently signed his guaranty without first seeing the promissory note.
On April 3, 1985, Respondent sеnt $11,-752.32 — by 24 separate checks — to be applied against the Friends of Ken Rothman “loan”, with directions to pay interest to date and apply the balance on a pro-rata basis “amongst the guaranteed notes." Respondent’s cover letter also suggested extending the “note” for a six-month period. On May 9, 1985, Respondent Fridkin sent the bank checks totalling $125.00 to be applied toward interest for the “loan”. Thereafter, on Deсember 26, 1985, a check for $5,000.00 was sent to .the bank with directions to apply $4,033.12 to pay the entire balance of another guaranty, and the balance to interest on the other “notes”.
Clearly, Respondent handled the transaction for all guarantors. He filled in the amounts on each individual guaranty and directed the bank how to apply the payments toward the balance on the various guaranties. Bank notices of the individual balаnces, while maintained in the names of the individual guarantors, were mailed in care of Respondent Fridkin.
On April 14, 1986, the bank made demand on Respondent for the balance due on his guaranty.
Based on the evidence admittеd at the hearing, the associate circuit judge found that there was no evidence of any underlying obligation of the Friends of Ken Roth-man on a note in the exact amount of $10,000.00; therefore Respondent was not liable on the guaranty.
The trial court admitted into evidence only the Fridkin guaranty and the April demand letter. All other exhibits and Respondent’s testimony were rejected by the trial court, but preserved through an offer of proof.
I.
Thе rules of construction applicable to a guaranty are the same as applied to other contracts.
Industrial Bank & Trust Co. v. Hesselberg,
*362
Ambiguities in written instruments may be of two kinds: (1) patent, arising upon the face of the documents, and (2) latent.
Busch & Latta Painting Corp. v. State Highway Commission,
Where ambiguity exists — latent or patent — the cardinal principle is tо determine the intent of the parties. Id. at 913. In order to determine the intent of the parties a court will consider the entire contract, subsidiary agreements, the relationship of the parties, the subject matter of the contract, the facts and circumstances surrounding the execution of the contract, the practical construction the parties themselves have placed on the contract by their acts and dеeds, and other external circumstances that cast light on the intent of the parties. Busch & Latta Painting Corp. v. State Highway Commission, supra at 198.
Neither party argues that the guaranty is ambiguous on its face; clearly it is not. However, the bank submits that a latent ambiguity exists. A latent ambiguity is not аpparent on the face of the writing and therefore, must be developed by extrinsic evidence.
Prestigiacamo v. American Equitable Assurance Co.,
Exclusion of all evidence relating to the transaction — with the exception of the guaranty and the demand letter — obscures the true intent of the parties. The intent of the parties can only be discerned if the court construes all the documents that were executed as part of the same transaction.
Tri-State Gas Co. v. Kansas City Southern Railway Co.,
Respondent cites general rules of law relating to guaranties. A guarantor’s undertaking may not be extended by implication beyond the strict letter of the obligation.
Industrial Bank & Trust Co. v. Hesselberg,
Respondent contends that this case should be analyzed in terms of “mistake” rather than ambiguity.
Hardin v. Ray,
A material alteration in or departure from the contract of guaranty without the guarantor’s consent will dis
*363
charge him.
Citizens Bank of Smithville v. Lair,
Respondent argues that he might have been prejudiced by the priority of allocation of payments among the guarantors. This argument has no merit because Respondent himself has determined the priority and allocation of payments.
A Texas case is most apposite. In
Bullock v. Kehoe,
Considering all the admissible evidence in accordance with Rule 73.01(c)(3), there is no factual dispute. Pursuant to Rule 84.14, the bank is entitled to judgment as а matter of law for the unpaid balance of Respondent Fridkin’s guaranty, plus interest.
II.
Respondent Fridkin raised, as an alternative theory, that the $50,000.00 promissory note was not a valid obligation of Friends of Ken Rothman since it wаs not executed by the committee’s treasurer, Harold Boraz. The trial judge specifically did not decide this issue.
There is no dispute that the Friends of Ken Rothman committee accepted $50,-000.00 from the bank. The committеe listed the obligation in its required campaign finance reports. Based on these facts, the claim that no obligation exists as to Friends of Ken Rothman fails. This Court in
Linwood State Bank v. Lientz,
Although the instant note was con-cededly executed by the president of defendant company, in the absence of express authority from the board of directors, and therefore contrаry to the provisions of the applicable by-law, we must nevertheless hold that the note constitutes a binding obligation. This follows because the law is well settled that where, as here, a corporation with knowledge of the act has ratified it, or has accepted the consideration of the note, it will be as much bound as if the note had been originally executed in exact conformity with the provisions of its bylaws.
Likewise the guarantоr is foreclosed from avoiding liability since it has no better defense than the primary obligors.
Mercantile Trust Co. v. Carp,
The judgment of the trial court is reversed, and this case remanded to enter judgment for the bank for the unpaid balance of Respоndent’s guaranty, plus applicable interest.