Opinion ID: 1708804
Heading Depth: 1
Heading Rank: 3

Heading: the estoppel claim

Text: Medley's third issue on appeal relates to his estoppel defense against SouthTrust. Medley asserts that SouthTrust's requirement that Medley sign numerous notes on his son's behalf, after the execution of the guarantee, misled Medley. In other words, Medley argues that there was no need for him to sign the notes if there was indeed a valid guaranty agreement in effect. To further support his estoppel claim, Medley alleges that once his son took on a partner in Medley & Company, and Medley told SouthTrust he would no longer be responsible for his son's debts, SouthTrust never contacted him again (which it had regularly done prior to his notice). Medley urges this Court to reverse the trial court's grant of a directed verdict on this issue. In General Electric Credit Corp. v. Strickland Division of Rebel Lumber Co., 437 So.2d 1240 (Ala.1983), this Court listed the essential elements of equitable estoppel: (1) The person against whom estoppel is asserted, who usually must have knowledge of the facts, communicates something in a misleading way, either by words, conduct, or silence, with the intention that the communication will be acted on; (2) the person seeking to assert estoppel, who lacks knowledge of the facts, relies upon that communication; and (3) the person relying would be harmed materially if the actor is later permitted to assert a claim inconsistent with his earlier conduct. 437 So.2d 1240, 1243. Again, we must return to the fact that there was a written agreement, signed by Medley, to guarantee his son's business debts. The guaranty agreement contains a clause wherein the parties agreed that no notice need be given to the guarantor upon the extension or renewal of indebtedness. [1] And, as earlier stated, where a party, having the ability to read and understand an instrument, fails to do so and signs it without reading it, he is bound unless fraud was practiced upon him. Colburn v. Mid-State Homes, Inc., 289 Ala. 255, 266 So.2d 865 (1972). There being no evidence of fraud, Medley is bound on the contract. Viewing the entire evidence in a light most favorable to the nonmoving party (Medley), we find that the trial court properly granted the directed verdict in favor of South-Trust on the issue of fraud.