Secured Transactions Commons^™

Suretyship-Discharge Of Guaranty By Payment Of Amount To Which Liability Is Limited

Michigan Law Review

Defendant wrote a letter to plaintiff, "Kindly extend credit to A for materials to the amount of $250, and I hereby become security for the same." Relying on this letter, plaintiff for several years sold goods to A. By reason of A's defaults, defendant paid plaintiff $71.80 on one occasion and $197.10 on another. Later, A became indebted to plaintiff to the amount of $464.22 and this action was brought to recover on the guaranty the sum of $250. The court construed the guaranty as a continuing one, but held that that fact did not impose a continuing liability on …