PAPER CORPORATION OF AMERICA, D/B/A SAXON PAPER-FLORIDA, APPELLANT,
v.
HELEN SANDOW, APPELLEE
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Paper Corporation of America appealed a judgment in a suit to recover on an individual guarantee of a corporate credit account. The court reversed the trial court's limitation of the guarantor's liability to $1,500 and held that Helen Sandow was liable for the entire debt of $41,901.16 incurred by the corporation under the credit application.
Sandow individually guaranteed Continental's entire account and is liable for the full debt of $41,901.16. The initial $1,500 credit limit was not a maximum limit but merely an initial credit line that was subsequently increased. The language "all debts incurred" in the credit application obligated Sandow for the entire amount, not just the initial allocation.
[1] A person who signs a corporate credit application as "the undersigned" is individually liable for all debts incurred by the applicant corporation pursuant to that applica…
[2] A handwritten notation on a credit application indicating an initial credit limit does not limit the guarantor's liability to that amount when the application states the…
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“She signed the subject application: "Helen San-dow Continental Graphic, Inc.," which, under established Florida law, made her individually liable on the credit application.”
Establishes that Sandow's signature on the credit application created individual liability as a guarantor.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceHelen Sandow signed a credit application for Continental Graphics, Inc.'s purchases of paper from Saxon Paper-Florida, signing as "Helen San-dow Conti…
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PER CURIAM.
This is an appeal by the plaintiff Paper Corporation of America d/b/a Saxon Paper-Florida [Saxon] and a cross appeal by the defendant Helen Sandow [Sandow] from a final judgment entered partially in favor of the plaintiff Saxon in a suit to recover on an individual guarantee of a corporate account. We reverse on the main appeal and affirm on the cross appeal based on the following briefly stated legal analysis.
First, we conclude that the defendant Sandow individually guaranteed the corporate account of Continental Graphics, Inc. [Continental] (now bankrupt) by signing Continental’s application for credit with the plaintiff on Continental’s purchases of paper from the plaintiff — which by the terms of the credit application made her, as “the undersigned,” individually liable for “all debts incurred by the applicant [Continental] pursuant to this Application for Credit.” [Credit Application, p. 2]. She signed the subject application: “Helen San-dow Continental Graphic, Inc.,” which, under established Florida law, made her individually liable on the credit application. Ross Oil Corp. v. Foshee, 517 So. 2d 713 (Fla. 5th DCA 1987), rev. denied, 528 So. 2d 1181 (Fla.1988); Roy v. Davidson Equip., Inc., 423 So. 2d 496 (Fla. 4th DCA 1982); Sabin v. Lowe’s of Florida, Inc., 404 So. 2d 772 (Fla. 5th DCA 1981); § 673.403(2)(b), Fla.Stat. (1987).
This being so, the defendant’s cross appeal has no merit and the contentions contained in it are rejected.
Second, we conclude that the defendant Helen Sandow is liable for the entire debt of $41,901.16 incurred by Continental under the subject credit application, rather than the $1,500 debt limit which the trial court imposed below. Under the terms of the credit application, Sandow was liable for “all debts” incurred by Continental pursuant to the subject application — not just $1,500 of such debts.
The trial court relied on two central facts to reach its contrary conclusion, to wit: (1) the credit application states that Continental’s “[estimated [purchases” of paper from the plaintiff would be “minimal,” and (2) a handwritten notation appears above this entry reading “OK CL $1,500, 12/18/80,” which, according to parol evidence received, means a credit limit of $1,500 was subsequently approved by the plaintiff for Continental on December 18, 1980. These facts do not, in our view, serve to limit the defendant’s liability to a “minimal” amount or to “$1,500,” the amount of credit initially allowed; they simply indicate that Continental anticipated “minimal” purchases of paper from the plaintiff (an erroneous anticipation as it turned out), and that the credit line extended for $1,500 was an initial credit line, not a maximum credit line. Subsequently, as another handwritten notation on the application indicates, this limit was increased so that Continental incurred $41,901.16 in total debts under the credit application. The defendant was liable under the terms of the application for “all [such] debts” — not just the $1,500 initially extended. See Causeway Lumber Co. v. King, 502 So. 2d 80 (Fla. 4th DCA 1987); Brann v. Flagship Bank of Pinellas, N.A., 450 So. 2d 237, 239 (Fla. 2d DCA 1984); Fidelity Nat’l Bank of South Miami v. Melo, 366 So. 2d 1218 (Fla. 3d DCA 1979); cf. Woodruff v. Exchange Nat’l Bank of Tampa, 392 So. 2d 285 (Fla. 2d DCA 1980) (guaranty limiting guarantor’s liability); Frell v. Dumont-Florida, Inc., 114 So. 2d 311 (Fla. 3d DCA 1959) (same).
The final judgment under review is reversed, along with the order awarding attorney’s fees and costs, and the cause is remanded to the trial court with directions to enter: (1) a final judgment in favor of the plaintiff Saxon in the amount of $41,-901.16 [minus any set-offs or credits which may be due to the defendant Sandow] plus prejudgment interest, and (2) an award of attorney’s fees and costs in favor of the plaintiff Saxon, taking into consideration the increased judgment for the said plaintiff.
Reversed and remanded.
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- Garland v. State, 404 So. 2d 772 (Fla. 5th DCA 1981)
- ROY v. Davidson Equip., Inc., 423 So. 2d 496 (Fla. 4th DCA 1982)
- Fid. Nat'l Bank OF S. Miami v. Melo, 366 So. 2d 1218 (Fla. 3d DCA 1979)
- Frell v. Dumont-Florida, Inc., 114 So. 2d 311 (Fla. 3d DCA 1959)
- Brann v. Flagship Bank OF Pinellas, N.A., 450 So. 2d 237 (Fla. 2d DCA 1984)
- Woodruff v. The Exch. Nat'l Bank OF Tampa, 392 So. 2d 285 (Fla. 2d DCA 1980)
- Causeway Lumber Co., Inc. v. King, 502 So. 2d 80 (Fla. 4th DCA 1987)
- Dade Tomato Co., Inc. v. Homestead Tomato Packing Co., Inc., 502 So. 2d 80 (Fla. 3d DCA 1987)
- Ross OIL Corp. v. Foshee, 517 So. 2d 713 (Fla. 5th DCA 1987)