In the

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 21-1922 

INDIGO OLD CORP., INC., 

Plaintiff-Appellant, 

v.

THOMAS P. GUIDO, 

Defendant-Appellee. 

____________________ 

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 19 C 7491 — Virginia M. Kendall, Judge. 

____________________ 

ARGUED DECEMBER 10, 2021 — DECIDED MARCH 28, 2022 

____________________ 

Before EASTERBROOK, KANNE, and SCUDDER, Circuit Judges. 

EASTERBROOK, Circuit Judge. As part of an asset-purchase 

agreement, IS Investments (ISI) promised to pay Indigo Old 

Corp. $2 million plus interest on a defined schedule. Thomas 

Guido guaranteed this debt. Indigo filed this suit under the 

diversity jurisdiction to collect on the guaranty. It is entitled 

to enforce Guido’s obligation without first trying to collect 

from ISI. But Indigo must show that ISI has failed to keep its 

promise to pay, and the district court dismissed the complaint 
2 No. 21-1922 

after concluding that it does not allege that ISI owes anything—yet. 2021 U.S. Dist. LEXIS 76258 (N.D. Ill. Apr. 21, 2021). 

On April 17, 2017, ISI, Indigo, Guido, and CIBC Bank executed a number of related documents. One of these is the note 

that ISI made in favor of Indigo. A second is the guaranty. A 

third is a subordination agreement, which entitles the Bank to 

be paid ahead of Indigo unless ISI meets certain financial conditions designed for the Bank’s security. Indigo’s complaint 

does not allege that ISI has retired the Bank’s loan or met the 

financial conditions. This means, the district judge held, that 

ISI is forbidden to pay Indigo—which also means that ISI is 

not in default under the note. No default by the principal 

debtor, no enforcement against the guarantor. 

Indigo relies on the guaranty’s language, the core of which 

is: 

[Guido] does absolutely, unconditionally and irrevocably guarantee to [Indigo] the payment of all amounts owed [Indigo] pursuant to the Note (such payments sometimes hereinafter referred to 

as the “Guaranteed Obligations”).

Upon any failure by [ISI] to timely make payment as required under the Note, [Indigo] may at its option proceed in the first instance against [Guido] to require full and prompt payment and 

performance of the Guaranteed Obligations, without first proceeding against [ISI] ... .

[Guido’s] obligations hereunder shall remain fully binding and 

shall not be impaired or discharged although [Indigo] may have 

waived one or more defaults by [ISI] or granted indulgences to 

[ISI], or extended the time of performance by [ISI], modified or 

amended the Note, extended or renewed the Note or released [ISI] 

from the performance of its obligations under such Note, or failed 

or neglected to exercise any of [Indigo’s] rights against [ISI], notwithstanding that [Guido] may not have consented thereto or may 

not have notice or knowledge thereof.
No. 21-1922 3 

Indigo particularly relies on the third paragraph, which says 

that side deals between Indigo and ISI, or anyone else such as 

the Bank, do not affect the guaranty’s obligation. 

There are two problems with Indigo’s argument. The first 

lies in the guaranty’s initial paragraph, which says that it covers the amounts “owed” by ISI. The next paragraph repeats 

this: the guaranty kicks in on ISI’s failure “to timely make 

payment as required under the Note”. As long as ISI does not 

owe anything, Guido need not pay on the guaranty. Of 

course, if the reason ISI does not owe anything is a modification within the scope of the third paragraph, then Guido remains liable. But that is the second problem. The district court 

found that there had not been any modification of ISI’s obligation, and Indigo does not contest this conclusion. 

If the note and guaranty had been the only original documents, then a later-adopted subordination agreement would 

have counted as a modification for the purpose of the third 

paragraph. That’s not what happened, however. All three 

documents were executed contemporaneously. Illinois law, 

which supplies the rule of decision, includes a “long-standing 

principle that instruments executed at the same time, by the 

same parties, for the same purpose, and in the course of the 

same transaction are regarded as one contract and will be construed together.” Gallagher v. Lenart, 226 Ill. 2d 208, 233 (2007). 

See also, e.g., Sandra Frocks, Inc. v. Ziff, 397 Ill. 497 (1947); Wilson v. Roots, 119 Ill. 379 (1887). 

Far from contesting the existence or application of this 

package-deal rule, Indigo’s reply brief tells us: “The District 

Court correctly ruled that the various agreements entered into 

to accomplish the business sale that underlies this dispute are 

to be considered together as a single instrument.” Indigo’s 
4 No. 21-1922 

sole appellate argument is that the district court did not give 

enough weight to the language of the guaranty in its role as 

part of a “single instrument.” Yet we have already shown why 

that is incorrect. To be sure, the guaranty allows enforcement 

without first trying to collect from ISI, but only if ISI has failed 

to make “payment as required under the Note”. And the note 

must be read together with the subordination agreement to 

determine when payments are “required”. The district court, 

reading all documents together, found that ISI is not yet “required” to pay anything to Indigo. It follows that Indigo cannot collect from Guido under the guaranty. 

We could imagine an argument that ambiguities in these 

documents might be illuminated by parol evidence. Indigo 

has not made such an argument, however, or alluded to any 

intrinsic or extrinsic ambiguities in the documents. Nor has 

Indigo denied that the guaranty is part of the original package; it acknowledges that all three documents must be read as 

one. Indigo stands on the documents’ language. Given that 

choice, the judgment must be 

AFFIRMED.