Plaintiff appeals from an order dismissing Counts II through VI of its petition for failure to state a claim for relief. The order was denominated final for purposes of appeal pursuant to Rule 81.06.
In Count I of its petition, plaintiff alleged that on March 3, 1978, it entered into a dealer franchise agreement with defendant Cycle Five, Inc., d/b/a Leadbelt Honda Suzuki. Cycle Five, Inc. was owned equally by Gary Johnson, David Agers, Dennis Flynn, Lloyd Agers and Robert Nappier.
Thereafter, on August 6, 1980, Cycle Five, Inc. entered into a wholesale financing security agreement with ITT Diversified Credit Corporation (hereinafter ITT). Cycle Five, Inc. financed its inventory of motorcycles through this financing security agreement with ITT. Thereafter, Cycle Five, Inc. defaulted under the terms of the security agreement owing ITT $8,490.93. On February 2, 1983, for valuable consideration, ITT assigned its claim against Cycle Five, Inc. for principal, interest, attorney’s fees and costs to U.S. Suzuki Motor Corporation. In addition, defendant Cycle Five, Inc. owed U.S. Suzuki Motor Corporation $974.97 on an open account for parts. Plaintiff sought recovery from Cycle Five, Inc. on the parts account and on ITT’s claim against Cycle Five, Inc. in the total amount of $9,465.90.
In Counts II through VI, plaintiff alleged that each of the owners, as well as David Agers’ wife, on January 30, 1978 executed a continuing guaranty with plaintiff. Each guarantor agreed:
to pay to U.S. Suzuki Motor Corporation ... (hereinafter called Creditor), ... on demand, ... any and all indebtedness of ... Leadbelt Honda-Suzuki (hereinafter called Debtors) to creditor. The word “indebtedness” is used herein in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of Debtors or any one or more of them, heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Debtors may be liable individually or jointly with others....
Each of the guarantors’ liability was limited to $5,000.00. All of the allegations of Count I were incorporated into Counts II through VI. Plaintiff prayed for judgment against each guarantor in the amount of $5,000.00. The trial court sustained defendants’ motions to dismiss Counts II through VI for failure to state a claim upon which relief can be granted. The order was denominated final for purposes of appeal.
A pleading is good against an objection that it fails to state a claim upon which relief can be granted if averments of the pleading accorded every reasonable and favorable intendment, invoke principles of substantive law which may entitle the pleader to relief.
DeMaranville v. Fee Fee Trunk Sewer, Inc.,
In order to state a cause of action
ex contractu
the plaintiff must allege the making and existence of a valid and enforceable contract between plaintiff and defendant, the right of plaintiff and the obligation of defendant thereunder, a violation thereof by defendant and damages resulting to plaintiff from the breach.
Johnson v. Great Heritage Life Insurance Co., 490
S.W.2d 686, 691 (Mo.App.1973).
See Mis
*107
souri Military Academy v. McCollum,
The only issue in this case is whether plaintiffs petition alleges an obligation of defendant to plaintiff under the guaranty agreement. It is well settled that the liability of a guarantor is to be strictly construed according to the terms agreed upon, and a guarantor is bound only by the precise words of his contract, and no stretching or extension of terms can be indulged in order to hold the guarantor liable.
Pelligreen v. Century Furniture & Appliance Co.,
It is apparent that the claim for unpaid parts purchased by Cycle Five, Inc. from plaintiff is covered by the plain meaning of the guaranty and hence, plaintiff has stated a claim for relief for this amount. Indeed, defendants candidly conceded this in oral argument. The more difficult question presented is whether the guaranties cover the assigned debt to ITT.
We note that the guarantee makes no express reference to indebtedness of the debtor incurred to third parties which subsequently is assigned to creditor. Plaintiff argues that the term “indebtedness” is defined broadly in the guarantee and by the plain terms of the guaranty, the debt of Cycle Five, Inc. to ITT now assigned to plaintiff is a debt, liability or obligation of the Debtor “made, incurred or created, ... however arising” which indebtedness each guarantor has agreed to pay to the plaintiff. We acknowledge that the term “indebtedness” is defined broadly in this guarantee. However, this was a continuing guarantee and as such, it contemplated “a series of transactions between the debtor and the creditor, rather than a single debt.”
Bruce v. Landmark Central Bank & Trust Co.,
The broad definition of “indebtedness” used here conflicts with the purpose of a continuing guaranty. This creates a latent ambiguity for which parol evidence will be admissible to explain the true intent of the parties.
Wired Music, Inc. v. Great River Steamboat Co.,
This result is consistent with the only reported case involving a guarantee under circumstances at all similar to those in the case at bar. In
Sherman Car Wash Equipment Co. v. Maxwell,
No matter how skeptical we may be that this guarantee was intended to cover Cycle Five, Inc.’s indebtedness which plaintiff might obtain by assignment, 1 nonetheless we cannot say as a matter of law there is no evidence which might be presented under which defendants might be liable for this indebtedness.
Reversed and remanded.
Notes
. The contract between ITT and Cycle Five, Inc. was not entered into until over two years after the franchise agreement and guaranty were signed.