By: E. Carson Lange and Gabriel Crafton
In a prior post , we discussed a grantor’s continuing liability under a promissory note that is renewed without his notice or consent where the guaranty is a continuing guaranty, meaning it contemplates revisions or extensions of time. In this post, we discuss the additional argument that a guarantor remains liable for a renewed promissory note, even absent notice or consent, where the revisions to the promissory note are not adverse to the guarantor’s interests.
The generally accepted rule is that a guarantor will be released from his guaranty by a material alteration, made without his consent, of his original obligation or duty. Causeway Lumber Co., Inc. v. King , 502 So. 2d 80, 81 (Fla. 4th DCA. 1987); Miami Nat’l Bank v. Fink , 174 So.2d 38, 40-41 (Fla. 3d DCA 1965). A modification to increase the interest rate applicable to the note has been deemed a material alteration that releases any guarantor. Miami Nat’l Bank , 174 So.2d at 40-41 . That said, Florida courts have found that an alteration is not “material” and does not release any guarantor, where it does not operate to the detriment of the guarantor. See Rizzi v. Serv. Dev. Corp. , 354 So. 2d 898, 900 (Fla. 4th DCA 1978); see also Anderson v. Trade Winds Enterprises Corp. , 241 So.2d 174, 178 (Fla. 4th DCA 1970) (additionally noting that the alteration was not reduced to writing, but was merely an indulgence granted to avoid litigation); Quarngesser v. Appliance Buyers Credit Corp. , 187 So.2d 662, 665 (Fla. 3rd DCA 1966) (same); Clark v. United Grocery Co. , 69 Fla. 624, 68 So. 766, 769 (1915) (same).