This section contains the nature of the case and procedural background.

Ries Biologicals (P) began selling medical supplies to Dialysis Management Systems, Inc. (DMS), which was having financial problems and accumulated a large debt to P. Eventually, P refused to ship to DMS except for cash on delivery, but resumed shipping on credit when the Bank of Santa Fe (D) orally agreed to guarantee payment. P was never fully paid and sued D to recover. At trial, the court admitted the statement of D's senior vice president guaranteeing payment. On appeal, D argues that these statements were hearsay and should not have been admitted.

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