Rights of the Guarantor. a. FACTS: On October 1, 1985, Wallace and Helen Brunson contracted with Bear Park, Inc., to sell certain real estate in Taney County, Missouri, for $366,200. At the closing, Bear Park gave the Brunsons a promissory note for $285,000 in partial payment. Several of Bear Park’s shareholders and directors, including Ronald Todd, signed a guaranty agreement on the back of the note. According to the terms of the note, Bear Park was to make quarterly payments of principal and interest, with the first payment of $68,800 due on January 7, 1986. The remaining quarterly payments, beginning April 7, 1986, would each be $7,226.80. When Bear Park failed to make the first payment, the Brunsons agreed to accept $7,000 in lieu of the full $68,800 and to increase the amount of the subsequent payments to cover the difference. Todd and the others knew nothing about the new terms. When Bear Park failed to make the next payment, the Brunsons declared the note in default and eventually demanded that the guarantors pay the amount due. No payments were made. The Brunsons assigned their interest in the note to Jake Kirkland, who foreclosed on the property. After the foreclosure sale, there was a deficiency of $36,454.84, plus interest, expenses, and attorneys’ fees. Kirkland sued Todd and the others for this amount. 

b. ISSUE: Discuss the liability of Todd and the others in this situation. 

c. RULE/RESOLUTION: [Kirkland v. Todd, 856 S.W.2d 936 (Mo.App. 1993)] How did the court answer the questions? What did the court decide? 

d. EXPLANATION/APPLICATION-Do you agree with the court? Why or why not? Can you change any facts to give a different result?

Answer rating: 100% (QA)

b ISSUE Liability of Todd and the others in this situation Under a contract of suretyship a guarantor or surety is responsible to discharge the debt o... View the full answer