The plaintiff tire distributor sued the corporate defendant and its sole proprietor for unpaid invoices totalling $659,908.87, relying on a personal guarantee allegedly signed by the proprietor.
The action against the corporate defendant was stayed due to bankruptcy.
The proprietor admitted the corporate debt but denied knowingly signing a personal guarantee, arguing the document was presented merely as a credit application update.
The court found that while the proprietor did sign the document, the plaintiff had a positive obligation to bring the guarantee clause to his attention due to their special, long-standing business relationship.
Because the plaintiff failed to do so, the guarantee was obtained by misrepresentation and was unenforceable.
The action against the personal defendant was dismissed.
