{ "id": 3643457, "name": "McLEAN COUNTY BANK, Plaintiff-Appellee, v. CHARLES E. BROKAW, SR., Defendant-Appellant (Eleanor Brokaw, Defendant); McLEAN COUNTY BANK, Plaintiff-Appellant, v. ELEANOR BROKAW, Defendant-Appellee (Charles E. Brokaw, Sr., Defendant)", "name_abbreviation": "McLean County Bank v. Brokaw", "decision_date": "1986-10-06", "docket_number": "Nos. 4\u201485\u20140760, 4\u201485\u20140771 cons.", "first_page": "103", "last_page": "107", "citations": [ { "type": "official", "cite": "148 Ill. App. 3d 103" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "169 Ill. App. 474", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 2784970 ], "opinion_index": 0, "case_paths": [ "/ill-app/169/0474-01" ] }, { "cite": "32 N.E. 918", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1912, "opinion_index": 0 }, { "cite": "145 Ill. 488", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5485660 ], "year": 1912, "opinion_index": 0, "case_paths": [ "/ill/145/0488-01" ] }, { "cite": "114 N.E. 181", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1893, "opinion_index": 0 }, { "cite": "275 Ill. 462", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2410127 ], "year": 1893, "opinion_index": 0, "case_paths": [ "/ill/275/0462-01" ] }, { "cite": "57 A.L.R.2d 1209", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "year": 1958, "pin_cites": [ { "page": "1211-12" } ], "opinion_index": 0 }, { "cite": "252 N.E.2d 734", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "114 Ill. App. 2d 428", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 1588978 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/114/0428-01" ] } ], "analysis": { "cardinality": 441, "char_count": 10735, "ocr_confidence": 0.778, "pagerank": { "raw": 4.89950402824256e-08, "percentile": 0.30787374090149655 }, "sha256": "e7d9e47a9c2a73e6b80b8ee4f25dd8b9f4c68e509811d786bbfa218494b8c860", "simhash": "1:c352c8ac791e892a", "word_count": 1712 }, "last_updated": "2023-07-14T16:17:24.109479+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "McLEAN COUNTY BANK, Plaintiff-Appellee, v. CHARLES E. BROKAW, SR., Defendant-Appellant (Eleanor Brokaw, Defendant).\u2014McLEAN COUNTY BANK, Plaintiff-Appellant, v. ELEANOR BROKAW, Defendant-Appellee (Charles E. Brokaw, Sr., Defendant)." ], "opinions": [ { "text": "JUSTICE SPITZ\ndelivered the opinion of the court:\nPlaintiff, McLean County Bank, filed a two-count complaint against defendants, seeking to recover on two separate guaranty agreements. In count I, plaintiff sought to recover from Charles E. Brokaw, Sr., on a guaranty agreement for the principal amount of $250,000 which was signed by Charles E. Brokaw, Sr., only. In count II, plaintiff sought to recover from Eleanor Brokaw on a guaranty agreement for the principal amount of $200,000 which was signed by both Eleanor and Charles Brokaw, Sr. Following a bench trial, the circuit court found for the plaintiff and against the defendant Charles E. Brokaw, Sr., on the count which referred to the guaranty signed by Charles E. Brokaw, Sr., only, and entered a judgment in plaintiff\u2019s favor for the principal amount of $250,000 plus accrued interest, which the parties stipulated to be $141,080.57, for a total of $391,080.57. The circuit court found for defendant Eleanor Brokaw on the count which referred to the guaranty signed by both Eleanor and Charles Brokaw, Sr. Plaintiff appeals, seeking to recover against Eleanor Brokaw on the guaranty which Mr. and Mrs. Brokaw both signed. Defendant Charles E. Brokaw, Sr., appeals, contending that neither of the two guaranties are enforceable. The appeals were consolidated.\nWe affirm in part and reverse in part and modify the judgment of the circuit court of McLean County.\nPlaintiff began loaning money to defendants\u2019 son, Charles Brokaw, Jr., in 1977 for the operation of a farm. At the time the original loan was made, and as a condition precedent to the making of the loan, plaintiff asked defendants to sign a guaranty agreement in the principal amount of $50,000 in addition to all interest which would accrue on this principal amount to provide security for their son\u2019s debt. Defendants executed said $50,000 guaranty agreement on January 24, 1977.\nAs defendants\u2019 son required additional funds to operate his farm, plaintiff made other loans to defendants\u2019 son and requested that defendants execute further guaranty agreements to cover these amounts. Subsequent guaranty agreements in the principal amounts of $75,000, $100,000, and $200,000 were signed by both defendants. Before each of these three subsequent agreements were signed, defendants\u2019 son was already indebted to plaintiff for a principal amount in excess of the amount of the guaranty agreement which was already in place. The understanding and practice of plaintiff and defendants was that when a subsequent guaranty agreement for a greater amount was executed by defendants, the prior agreement was replaced and extinguished.\nBy a letter dated March 21, 1980, plaintiff requested defendants to execute a guaranty agreement for the principal amount of $250,000. On March 28, 1980, Charles Brokaw, Sr., signed this guaranty agreement. Eleanor Brokaw did not sign the guaranty agreement for the principal amount of $250,000, and claimed to have no knowledge of her husband\u2019s execution of that guaranty agreement.\nCharles Brokaw, Jr., defaulted on his loan payments, and plaintiff filed a complaint to foreclose on the guaranty agreement for the principal amount of $200,000 which was signed by both defendants and the guaranty agreement for the principal amount of $250,000 which was signed by Charles Brokaw, Sr., only. The circuit court held that Eleanor Brokaw was not liable to plaintiff for any amount, but that Charles Brokaw, Sr., was liable to plaintiff for $250,000 plus accrued interest on that amount. The parties stipulated that the accrued interest on the principal amount of $250,000 was $141,080.57. The circuit court entered a judgment for plaintiff and against Charles Brokaw, Sr., for $391,080.57.\nCharles Brokaw, Sr., appeals from the judgment entered against him (No. 4 \u2014 85\u20140760), contending that the guaranty agreement provided a maximum amount which could be loaned to the principal debtor, and that the plaintiff breached the guaranty agreement by loaning amounts in excess of this maximum amount, thereby relieving him from any obligations under the guaranty agreement. Charles Brokaw, Sr., relies upon King Korn Stamp Co. v. Guaranty Bank & Trust Co. (1969), 114 Ill. App. 2d 428, 252 N.E.2d 734, for the proposition that if a clause in a guaranty agreement limits the amount a bank may lend to the principal debtor, and that amount is exceeded, the guarantor is released from liability under the guaranty agreement.\nAlthough we do not believe that King Korn is distinguishable from the instant case, our research reveals that the holding in King Korn is inconsistent with the vast majority of cases from other jurisdictions. As has been stated:\n\u201cThe general rule is that in the absence of the expression of a contrary intention, the specification of the amount of credit to be extended, and a fortiori, the specification of a maximum amount of the guaranty, is indicative of an intention to limit the amount of the guarantor\u2019s liability, and not to limit the amount of the net credit which may be extended to the debtor, as a condition of any liability at all on the part of the guarantor. In the overwhelming majority of cases, the language of instruments construed by the courts has been held not to be conditional, but merely to limit the amount of the guarantor\u2019s liability. In the few cases in which the language has been held conditional, and the breach thereof by the creditor to discharge the guarantor from all liability, that intention was clearly and unequivocally expressed. And in many more cases in which the language could very well be strongly argued to limit the amount of credit to be extended, it has nevertheless been held not to be conditional, but merely to limit the amount of the guarantor\u2019s liability. In short, the courts appear clearly reluctant to relieve a guarantor of all liability, unless that course becomes inescapable because of the breach of a condition stated to be such with the utmost clarity and definiteness.\n* * *\nThe extension of net credit in excess of the amount of credit specified in the guarantor\u2019s contract, or, a fortiori, in excess of the amount of the guaranty, does not discharge or release the guarantor from all liability, in the absence of a clear expression of intention in the contract that the specified amount constitutes a limitation on the amount of credit to be extended to the debtor, as an absolute condition of the guarantor\u2019s undertaking.\u201d Annot., 57 A.L.R.2d 1209,1211-12 (1958).\nAdditionally, King Korn appears to be in conflict with previous Illinois case law on this issue. (See Scovill Manufacturing Co. v. Cassidy (1916), 275 Ill. 462, 114 N.E. 181; Taussig v. Reid (1893), 145 Ill. 488, 32 N.E. 918; United States Gypsum Co. v. Bernstein (1912), 169 Ill. App. 474.) Furthermore, we disagree with the reasoning and the holding of King Korn. For the foregoing reasons we choose not to follow King Korn, and hold that the circuit court did not err in rejecting defendants\u2019 argument that they were released from liability on the guaranty agreements because the bank loaned their son more money than defendants guaranteed.\nPlaintiff appeals from the judgment entered in favor of Eleanor Brokaw (No. 4 \u2014 85\u20140771), contending that they should be allowed to recover from Eleanor Brokaw on the $200,000 guaranty agreement in addition to the judgment they already received pursuant to the $250,000 guaranty agreement. Plaintiff makes this argument despite the fact that it freely admitted, both at' the trial of this cause and in its appellate briefs, that it was the intention of the plaintiff when the $250,000 agreement was prepared that it would replace the $200,000 agreement. Eleanor Brokaw contends that she was relieved of any obligation on the $200,000 guaranty agreement when plaintiff accepted a new loan guaranty from Charles Brokaw, Sr.\nOn the one hand, it is inconceivable to use that plaintiff could have received a greater amount of security by having only Charles Brokaw, Sr., sign the subsequent guaranty agreement than they would have had if Eleanor Brokaw signed the document as well. On the other hand, it is clear to us that one co-guarantor cannot release another co-guarantor from all liability simply by signing a new agreement.\nBy signing the $250,000 guaranty agreement, Charles Brokaw, Sr., agreed to be liable for an additional principal amount of $50,000. Although Eleanor Brokaw did not agree to be liable for an additional principal amount of $50,000, it is inconceivable that her liability for the principal amount of $200,000 could have been extinguished by a unilateral act of her husband. However, because of the parties\u2019 prior practice of having subsequent guaranty agreements replace and extinguish prior agreements, and because of the obvious intentions of the parties, it would be unconscionable to hold that plaintiff could recover the entire principal amounts plus accrued interest of both the $200,000 guaranty agreement which was executed by both defendants and the $250,000 guaranty agreement which was signed by Charles Brokaw, Sr.\nConsequently, we believe that the appropriate outcome of this case is to hold Eleanor and Charles Brokaw, Sr., jointly and severally liable for $200,000 plus accrued interest pursuant to the $200,000 guaranty agreement they both signed, and to hold Charles Brokaw, Sr., personally liable for an additional $50,000 plus accrued interest as a result of the increased liability he alone assumed by executing the guaranty agreement in the principal amount of $250,000.\nWe hereby reverse the judgment of the circuit court of McLean County as to Eleanor Brokaw (No. 4\u201485\u20140771), and enter a judgment for plaintiff against Eleanor Brokaw and Charles Brokaw, Sr., jointly and severally for $312,864.46, representing the principal amount of $200,000 plus the interest accruing thereon. Additionally, we hereby enter a judgment for plaintiff and against Charles Brokaw, Sr., personally, for $78,216.11, representing the principal amount of $50,000 plus the interest accruing thereon.\nNo. 4 \u2014 85\u20140760 affirmed in part, reversed in part, and modified. No. 4 \u2014 85\u20140771 reversed and modified.\nGREEN and MORTHLAND, JJ., concur.", "type": "majority", "author": "JUSTICE SPITZ" } ], "attorneys": [ "Costigan & Wollrab, of Bloomington, for Charles E. Brokaw, Sr., and Eleanor Brokaw.", "Thomas M. Barger III, of Livingston, Barger, Brandt & Schroeder, of Bloomington, for McLean County Bank." ], "corrections": "", "head_matter": "McLEAN COUNTY BANK, Plaintiff-Appellee, v. CHARLES E. BROKAW, SR., Defendant-Appellant (Eleanor Brokaw, Defendant).\u2014McLEAN COUNTY BANK, Plaintiff-Appellant, v. ELEANOR BROKAW, Defendant-Appellee (Charles E. Brokaw, Sr., Defendant).\nFourth District\nNos. 4\u201485\u20140760, 4\u201485\u20140771 cons.\nOpinion filed October 6, 1986.\nRehearing denied November 3, 1986.\nCostigan & Wollrab, of Bloomington, for Charles E. Brokaw, Sr., and Eleanor Brokaw.\nThomas M. Barger III, of Livingston, Barger, Brandt & Schroeder, of Bloomington, for McLean County Bank." }, "file_name": "0103-01", "first_page_order": 125, "last_page_order": 129 }