Opinion
June 8, 1971.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 33
Spurgeon, Aman & Hanes, William R. Aman, Colorado Springs, for plaintiff-appellee.
Paul Barber, Colorado Springs, for defendants-appellants.
COYTE, Judge.
Joe Cagnoni, Paul Barber, and Donald Pross, parties to this action, were officers and shareholders of a corporation known as C--M Purchasing Corporation.
The corporation borrowed $5,000 from a bank, giving a promissory note in return. The three parties to this action all signed as co-guarantors of the note. The corporation defaulted in payment, leaving a balance due and owing of $4,703.20. After demand by the bank, Cagnoni paid the bank, which in turn assigned the note without recourse to him.
Cagnoni then sued Barber and Pross as co-guarantors seeking their pro rata contribution to reimburse him. Trial was to the court which found in Cagnoni's favor.
Two errors have been alleged. First, the two defendants claim the trial court failed to properly take into account an agreement entered into by the parties. The pertinent provisions of this agreement are found in paragraph 6, which states:
'As between themselves, in the event the Corp. is unable to pay the note when due in full, Cagnoni, Barber and Pross agree to make up any deficit to the lending institution, if any should occur, in equal parts; and, if the share of any one or more of them should be paid by the other or others, the party or parties making the advancement shall be entitled to pro rata reimbursement from the defaulting party or parties. If a defaulting party does not cure his default by paying his pro-rata share within 30 days of said default, then he shall forfeit and surrender his stock to the party or parties curing his default pro-rata.'
The defendants assert that upon presentation of their shares to Cagnoni, their individual liability to him ceased. We do not interpret this particular provision in such a manner. The provision is clear that the co-guarantors of the note were to be considered equally liable in case of default by the corporation. The provision for surrender of the stock to the party paying off the note does not state that such surrender shall discharge the liability of the defaulting party. If this were the intent, it could have been so stated.
The clause pertaining to surrender of the shares clearly provides for mandatory surrender only if the defaulting party has not made good his co-guaranty within thirty days. It does not state that at any time the defaulting party may elect to surrender his share in lieu of payment. This is the interpretation defendants seek, but it is not one to be found in the words of the contract. The court's role in construing contracts is to look at the words used to define the intent of the parties. Soderberg v. Verdos, 158 Colo. 221, 405 P.2d 946. Our function is not to make additions to the existing contract or to make a new contract for the parties. Kansas City Life Insurance Co. v. Pettit, 99 Colo. 268, 61 P.2d 1027. If the parties in fact wanted the surrender of the stock to relieve them of liability, they could have so written the contract. But absent such provision, we must conclude that the intent of this particular clause was merely to protect the paying party and not to give an election to one in default.
The second error asserted is the failure of the trial court to allow a claimed offset. The president of the corporation (not a party to this action) had taken corporate funds which it is claimed brought about collapse of the corporation. This claimed offset arose out of the efforts of the defendants to recover approximately $1,600 from the president of the corporation.
However, the defendants claim that the reasonable value of their time, efforts, and skills used to recover this sum amounted to over $4,500.
The trial court decided, and we agree, that the plaintiff is not liable for any of this amount. It is clear from their answer, that the defendants in recovering this amount were acting in their role as officers of the corporation for the benefit of the corporation. If indeed the defendants are entitled to remuneration, for their time and effort spent in recovering this sum, they must look to the corporation for repayment, not the individual shareholder, for the law is clear that in the absence of an agreement to the contrary the individual shareholder is not liable for the debts of the corporation. Renault, Inc. v. Marble, 10 Cir., 317 F.2d 265.
Judgment affirmed.
ENOCH and DUFFORD, JJ., concur.