THOMAS C. FRELL, APPELLANT,
v.
DUMONT-FLORIDA, INC., A FLORIDA CORPORATION, APPELLEE
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Frell, as guarantor, appealed a jury verdict judgment on a written guaranty for a $10,000 line of credit extended to Best Appliance Sales & Service Ltd. The court rejected his arguments that the guaranty became ineffective after the principal debtor changed its name and a partner withdrew, holding him estopped from raising this defense.
Frell remained liable on the guaranty. A 'line of credit' means a limit of credit covering a series of transactions, not a one-time maximum. Frell was estopped from claiming the guaranty became ineffective due to the name change because he participated in the change, participated in profits afterward, and never disclaimed responsibility until sued.
“the ordinary meaning of "a line of credit", which is a limit of credit to cover a series of transactions”
The court's interpretation of the guaranty term, rejecting Frell's argument that the $10,000 limit meant a one-time maximum.
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Join FLexlaw to unlock all legal intelligenceFrell guaranteed a $10,000 line of credit for Best Appliance Sales & Service Ltd. After the principal debtor changed its name and one of the partners …
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The appellant was defendant in an action on a written guaranty. He appeals from a final judgment for the plaintiff which was based upon a jury verdict. The letter of guaranty contained the following:
“You have been requested to open a line of credit not to exceed Ten Thousand Dollars ($10,000.00), in favor of: Best Appliance Sales & Service Ltd.
“You have indicated that you are unwilling to extend this line of credit to this dealer without other, and further, security of payment thereof.
“In consideration of this agreement to extend this dealer a line of credit in question, the undersigned, hereby undertakes to, and does guarantee payment of, any, and all, credit granted by you not to exceed Ten Thousand Dollars ($10,000.00), * *
The appellant contends first that the guaranty was, by its terms, limited to $10,000 and after that total amount had been purchased the guaranty did not cover new purchases even though the indebtedness was not as much as $10,000. This argument overlooks the ordinary meaning of “a line of credit”, which is a limit of credit to cover a series of transactions. Pittinger v. Southwestern Paper Co., Tex. Civ.App.1941, 151 S.W.2d 922.
It is further argued that the guaranty was rendered ineffective as to purchases from the plaintiff after the date that the principal-debtor changed its name and one of the partners withdrew. The trial judge *313correctly found that the appellant as guarantor was estopped to claim this defense because the guarantor 1) participated in the change of name, 2) participated in the profits (if any) of the original debtor after the change, which business both before and after the name change was dependent upon the purchases made under the continuing guaranty, and 3) the guarantor at no time disclaimed responsibility under the guaranty until suit. See Wilson & Toomer Fertilizer Co. v. American Cyanamid Co., 5 Cir., 1929, 33 F.2d 812.
The appellant also assigns and argues certain other alleged errors. They have been considered and are found not well taken. The judgment of the trial court is therefore affirmed.
Affirmed.
HORTON, C. J., and MILLEDGE, STANLEY, Associate Judge, concur.
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LEA Indus., Inc. v. Raelyn Int'l, Inc., 363 So. 2d 49 (Fla. 3d DCA 1978)…y were written, not to orders as yet uncon-templated at the time of the exchange of correspondence. The record reveals no disclaimer of responsibility under the guarantee until the instant suit was filed. See generally Frell v. Dumont-Florida, Inc., 114 So. 2d 311 (Fla. 3d DCA 1959). The later correspondence did not modify the original, absolute guarantee. Where agreements are unambiguous, they must be enforced according to their terms: “A continuing guaranty covers all transactions, including those arising…
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Burt v. Cmty. Nat'l Bank OF BAL Harbour, 142 So. 2d 118 (Fla. 3d DCA 1962)…ily lead one to believe that it was continuing, the parties, through their actions,4 appear to have interpreted the guaranty of “notes aggregating a sum not to exceed $50,000” as a continuing one. Compare Frell v. Dumont-Florida, Inc., Fla.App.1959, 114 So. 2d 311. We need not, however, decide whether the $50,000 limitation fixed the maximum of the guarantor’s undertaking without limit as to the amount of loans made, or whether the guaranty was intended to apply only to the first $50,000 loaned or advanced.…
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Purnima Sheth v. C.C. Altamonte Joint Venture, 976 So. 2d 85 (Fla. 5th DCA 2008)…usiness. 69 A.L.R.3d 567 at § 6. This is an estoppel argument. The idea is that if a guarantor participated in changing a business, that guarantor is es-topped from later arguing that the change released her liability. Frell v. Dumont-Florida, Inc., 114 So. 2d 311, 312-13 (Fla. 3d DCA 1959). In this case, Dr. Sheth did not voluntarily participate in any change in the business that would preclude her reliance on that change for liability release. Instead, Dr. Sheth was ordered to walk away from the business an…
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- Wilson & Toomer Fertilizer Co. v. Am. Cyanamid Co., 33 F.2d 812 (5th Cir. 1929)