JP Morgan Chase Bank v. Earth Foods

Plaintiff Bank extended a line of credit to a food business, with its inventory as collateral. The three co-owners of the business all personally guaranteed the loan. The business stopped making loan payments, and one of the co-owners notified the Bank that the business inventory was being depleted and demanded that the Bank take action. The Bank then sent a notice of default and sued the business and the three owners. The Surety Act applies to and protects only sureties, not guarantors. However, whether the parties intended to create a surety or a guarantor, and considering not only the language of the written agreement (which referred to a "guarantee"), is to be determined from all facts and circumstances, and thus summary judgment is inappropriate. (FITZGERALD, FREEMAN, THOMAS, GARMAN, KARMEIER, and BURKE, concurring.)