RONNIE WOODRUFF, APPELLANT AND CROSS-APPELLEE,
v.
THE EXCHANGE NATIONAL BANK OF TAMPA, APPELLEE AND CROSS-APPELLANT
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The court held that a guaranty provision stating a $275,000 ceiling on the guarantor's liability operates as a cap on aggregate liability rather than limiting the guaranty to only the first $275,000 of the underlying debt. Accordingly, the guarantor remains liable for deficiencies up to the specified ceiling, even after the creditor has recovered proceeds from the security.
The court held that the $275,000 limit in the guaranty expresses a ceiling on the guarantor's aggregate liability rather than designating a specific portion of the debt. The guarantor remains liable for deficiencies up to the $275,000 cap without regard to the amount of proceeds received by the creditor from the security.
[1] A guaranty containing a ceiling on the guarantor's aggregate liability requires the guarantor to answer for deficiencies up to the specified ceiling, irrespective of the…
[2] A guaranty's stated limit on liability refers to the guarantor's maximum exposure, not a specific portion of the debtor's indebtedness that is guaranteed.
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Join FLexlaw to unlock all legal intelligence“We agree with the Bank's position that the limit of liability stated in the guaranty expressed a limit on Woodruff's aggregate liability rather than a designation of the first $275,000 of the indebtedness as that part of the debt which Woodruff guarantied.”
This establishes the court's interpretation of the guaranty ceiling as an aggregate cap rather than a designation of a specific portion of the debt.
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Join FLexlaw to unlock all legal intelligenceThe Bank sued debtors and guarantor Woodruff to recover a deficiency on a secured second renewal note dated August 10, 1977. Following the debtors' de…
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DANAHY, Judge.
We have considered the point asserted by appellant on these appeals and find it to be without merit. However, we find merit in the point raised on cross-appeal in Case No. 79-996.
Cross-appellant, The Exchange National Bank of Tampa (The Bank), sued its debtors and their guarantor, cross-appellee Ronnie Woodruff (Woodruff), to recover a deficiency due the Bank by the debtors under a secured second renewal note dated August 10,1977. Following default by the debtors, the Bank took possession of the note’s security and sold it for an amount exceeding $275,000. That amount was applied against the indebtedness, leaving the deficiency for which this suit was brought.
Woodruff had executed a guaranty of the note reading as follows:
The undersigned [Woodruff] .. . hereby unconditionally guaranties to Bank .. . that all sums stated in such [note] to be payable will be promptly paid in full when due in accordance with the provisions of such [note] . . . together with any and all legal and other costs and expenses paid or incurred in connection therewith ....
PROVIDED, HOWEVER, that the limit of the liability of the undersigned hereunder which shall exist at any time shall be the sum of $275,000 exclusive of interest, but in the event this limit is exceeded the undersigned shall nevertheless be liable hereunder to the extent of said limit and the enforceability of this guaranty shall not be impaired or diminished by such excess.
The trial judge ruled that Woodruff was not liable to the Bank for the deficiency because his liability under the guaranty extended only to $275,000 of the debtors’ indebtedness to the Bank under the note, so that his obligation was satisfied as a matter of law when the indebtedness was satisfied to the extent of $275,000 by application of the security. We reverse the final judgment to the extent of that ruling. We agree with the Bank’s position that the limit of liability stated in the guaranty expressed a limit on Woodruff’s aggregate liability rather than a designation of the first $275,000 of the indebtedness as that part of the debt which Woodruff guarantied. A general guaranty that contains only a ceiling on the guarantor’s aggregate liability requires the guarantor to answer for deficiencies up to the specified ceiling without respect to the amount of proceeds received by the creditor from the debtor. Strange v. Cooper Grocery Company, 4 S.W. 2d 232 (Tex.Civ.App.1928), reversed on other grounds, 18 S.W. 2d 609 (Tex.Com.App.1929).
We reverse in Case No. 79-996 with directions that the trial judge enter an amended final judgment in favor of the Bank and against Woodruff for the deficiency due from the debtors under the second renewal note of August 10, 1977. The final judgment in that case is affirmed in all other respects, together with the judgments which are appealed in Case No. 79-1099 and Case No. 79-1336.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH DIRECTIONS.
RYDER, Acting C. J., and DEWELL, JOHN H., Associate Judge, concur.
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Goldome Sav. Bank v. Bartholomew, 512 So. 2d 975 (Fla. 2d DCA 1987)…or 100% of the total indebtedness and severally liable for an amount up to 42% of the total indebtedness. The indebtedness is whatever remains to be paid Goldome on the promissory note from Port Iona. See Woodruff v. Exchange National Bank of Tampa, 392 So. 2d 285 (Fla. 2d DCA 1980). Because Goldome obtained a final judgment of foreclosure of the mortgage that secured that note and the amount of that final judgment is greater than the fair market value of the property obtained by Goldome at the foreclosure sa…
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Jong-In KIM v. Peoples Fed. Sav. & Loan Ass'n OF Tarentum, 538 So. 2d 867 (Fla. 1st DCA 1989)…Last, we agree with the argument raised by cross-appellant/Peoples, that the trial court erred in offsetting the appellants’ liability by the value received by Peoples from the judicial sale, finding both Woodruff v. Exchange National Bank of Tampa, 392 So. 2d 285 (Fla. 2d DCA 1980) and Goldome Savings Bank v. Bartholomew, 512 So. 2d 975 (Fla. 2d DCA 1987) to be directly on point. In Woodruff, the guarantor/defendant agreed to guarantee a note executed by the debtor to Exchange National Bank, but specificall…
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Bakerman v. Atl. Nat'l Bank OF Fla., 506 So. 2d 487 (Fla. 4th DCA 1987)…he principal amount of the loan in question, and it is undisputed that the ap-pellee bank collected an amount in excess of that guaranty from other sources, thereby rendering appellant’s guaranty moot. Cf Woodruff v. Exchange National Bank of Tampa, 392 So. 2d 285 (Fla. 2d DCA 1980). In addition, it is undisputed on this record that appellee bank unconditionally released appellant’s co-guarantors, thereby releasing appellant by operation of law. See Movielab, Inc. v. Davis, 217 So. 2d 890 (Fla. 3d DCA 1969).…
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