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Case Citations [1] (Spring 2025)

handle is hein.ali/relwsec0597 and id is 1 raw text is: THE AMERICAN LAW INSTITUTE Spring 2025 Citations SECURITY DIVISION II. SURETYSHIP CHAPTER 3. NATURE AND CREATION OF SURETYSHIP § 88. Interpretation of Contract of a Surety C.A.7, 2024. Quot. in case quot. in sup. After a commercial tenant defaulted on its rent and later rejected its lease through bankruptcy, causing landlord to default on its mortgage, landlord sued guarantor of tenant's rent payments, alleging breach of the guaranty, and landlord's mortgage lender intervened. The district court rejected guarantor's affirmative defenses to liability under the guaranty and granted summary judgment for lender, finding that lender was entitled to unpaid rent from guarantor. This court affirmed, holding that guarantor had waived its right to present affirmative defenses to liability under the terms of the guaranty. The court explained that, under Restatement of Security § 88, guaranty contracts were interpreted according to the standards that governed interpretation of contracts in general, and that the plain language of the guaranty established that guarantor's liability could not be subject to any reduction or defense where the tenant defaulted on the lease or rejected the lease through bankruptcy. WEC 98-C LLC v. SFA Holdings, Inc., 99 F.4th 961, 970. CHAPTER 5. SURETY AND CREDITOR § 124. Non-Disclosure by Creditor Ind.App.2024. Subsec. (2) cit. in case cit. in sup. After borrower defaulted on a farm-operating loan, bank filed an action to foreclose on a mortgage on land owned by borrower's father, who agreed to act as surety for the loan, and to obtain an in rem judgment against the land. The trial court conducted a bench trial and entered judgment for bank. This court affirmed, holding that bank's failure to notify surety of borrower's misconduct in misusing the loan to purchase real estate and farm equipment and in selling crops to buyers that had not been disclosed to bank did not discharge surety from his obligations under the surety agreement. In support of its finding, the court relied on Restatement First of Security § 124 and Restatement Third of Suretyship and Guaranty § 47 in explaining that the surety could not COPYRIGHT 02025 By THE AMERICAN LAW INSTITUTE All rights reserved Printed in the United States of America For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.