The opinion of the court was delivered by: HOWARD
This is an action instituted by Lois H. Wood, of Green County, Arkansas, against John L. Mangum, of Clinton, Missouri, to recover the sum of $ 25,000.00 pursuant to a guaranty agreement executed by Mangum on August 13, 1980, guaranteeing payment of a promissory note dated March 10, 1980, executed by Tank and Tower Erectors, Inc. (Tank) to Lois H. Wood as payee, in the sum of $ 45,000.00.
The Court holds that because of the affirmative conduct of plaintiff which resulted in the demise of Tank as a corporate entity and prevented Tank from paying the indebtedness, the guarantor, Mangum, is discharged from liability under the written guaranty.
On March 10, 1980, Tank, through its president, Lois H. Wood, plaintiff herein, executed a promissory note payable to Wood in her individual capacity in the sum of $ 45,000.00 with interest at 10% per annum until paid. At that time, Wood owned approximately 495 shares of Tank's stock with Mangum owning an equal number of shares and one Norma Jean Gray owning approximately ten shares.
On August 13, 1980, Mangum, in consideration of Wood "[extending] the payment schedule for such note and certain management authority . . . extended to John L. Mangum in the management of the affairs of Star Cooling Towers, being a division of Tank and Towers Erectors, Inc.", executed a guaranty agreement guaranteeing the $ 45,000.00 note to Wood " in the event of a default in the payment of the note " by Tank. (Emphasis added).
"Tank and Tower Erectors, Inc.
By Lois H. Wood - President
Attest: Melba J. Wood - Secretary"
extended payment of the balance due to Wood under the note of March 10, 1980, in the sum of $25,000.00 to "any time after June 30, 1981". Wood did not execute this extension in her individual capacity.
On June 26, 1981, Articles of Incorporation of Cooler Consultants and Erectors, Inc. (Cooler), were filed with the Secretary of State for the State of Arkansas. The nature of the business to be pursued by Cooler was the same as Tank's, namely: "To engage in the business of construction and repair of cooling towers." The registered office of Cooler was Paragould, Arkansas. Tank's principal's office was also Paragould, Arkansas. Cooler was a competitor of Tank.
Wood, while serving as president of Tank, without knowledge of Mangum, participated in the creation of Cooler. After Cooler's incorporation, Wood, without the knowledge and consent of Mangum, served as a consultant to Cooler. Wood submitted her resignation on July 15, 1981, "as a director and officer of Tank and Tower Erector, Inc., effective July 31, 1981."
Tank has defaulted on the payment of the March 10, 1980, note to Wood. Mangum has refused to respond to Wood's demand for payment contending that Wood's "wrongful conduct toward Tank" has discharged and cancelled the indebtedness.
A balance sheet for Tank dated December 31, 1979, discloses that Tank, on that date, possessed assets totaling $ 252,498.62. This figure represented the following: Cash $ 67,847.11, accounts receivable $ 23,583.01, loans $ 10,912.73, deferred job costs $106,173.91 and fixed assets, less accumulated ...