Fidelity Nat. Bank of South Miami v. Melo, 78-767
| Decision Date | 30 January 1979 |
| Docket Number | No. 78-767,78-767 |
| Citation | 366 So.2d 1218 |
| Parties | FIDELITY NATIONAL BANK OF SOUTH MIAMI, Appellant, v. Peter MELO and Angelica Melo, Appellees. |
| Court | Florida District Court of Appeals |
Valdes-Fauli & Valdes-Fauli and Clemente L. Vazquez-Bello, Miami, for appellant.
Keith, Mack, Lewis & Allison, Miami, for appellees.
Before BARKDULL, KEHOE and SCHWARTZ, JJ.
Appellant, plaintiff in the non-jury trial below, brings this appeal from a final judgment entered in favor of appellees, defendants below, in suit on a loan guaranty. We reverse.
The facts relevant to this appeal may be summarized as follows: In October of 1974, appellee Peter Melo became a one-third stockholder and corporate secretary of Marsal Fish Market, Inc. (hereinafter referred to as the Corporation). Appellee Angelica Melo was the wife of Peter. During November of 1974, the Corporation negotiated a $5000 loan from appellant, the Fidelity National Bank of South Miami (hereinafter referred to as the Bank), which was evidenced by a promissory note. During the negotiations for the loan, appellee Peter Melo represented himself as an officer of the Corporation. As a prerequisite for the loan, appellees executed an unlimited and continuing written guaranty, dated November 18, 1974, on behalf of the Corporation in favor of the Bank. By the terms of this agreement, appellees assumed both liability for all the existing indebtedness and all future extensions of credit or loans of the Bank to the Corporation. The Corporation satisfied in full the November, 1974 promissory note; however, on May 23, 1975, the Corporation negotiated a new loan from the Bank, also in the amount of $5000, as evidenced by a promissory note. Thereafter, on August 1, 1975, appellee Peter Melo entered into an agreement with the other stockholders of the Corporation whereby he resigned from and surrendered all his interest in the Corporation. Appellee Peter Melo gave no notice to the Bank of his separation from the Corporation. The Bank learned of his separation after it had filed this lawsuit. Further, appellee Peter Melo never attempted to terminate the written guaranty in favor of the Bank. Subsequently, the promissory note of May 23, 1975, was renewed in full by the Bank and evidenced by a renewal note dated August 21, 1975. In turn, the note of August 21, 1975, which bore interest at the rate of 11% Per annum, was renewed in full through a promissory note dated October 20, 1975, which had an interest rate of 13% Per annum. This latter promissory note, on which no principal or interest payments have ever been made, is the debt sought to be recovered by the Bank from the appellees through the guaranty agreement. The parties stipulated that subsequent to the payment of the November, 1974 note, there was no notice or communication between them. Further, it was stipulated that the Corporation, on May 25, 1975, without notice or consent from appellees, borrowed the $5000, evidenced by the note of the same date which was subsequently renewed twice. From the trial court's entry of a final judgment in favor of appellees, appellant appeals.
Appellant raises the following two points on appeal: first, that a creditor, who is the holder of an absolute, unlimited, and continuing written guaranty securing the payment of loans and extensions of credit to a principal-debtor, is not obligated to give notice to the guarantor thereon of new loans and extensions of credit made to the principal-debtor, particularly where the guaranty by its terms contains language waiving such notice; and second, that a creditor, who is the holder of such a contract of guaranty, is not required to give notice to the guarantor thereon of any increases or variations in the rate of interest charged the principal-debtor, particularly where the guaranty by its terms contains language waiving such notice.
The pertinent portions of the written guaranty in this case are as follows:
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