Opinion ID: 1676821
Heading Depth: 2
Heading Rank: 4

Heading: Intervention of Highland Bank

Text: Highland Bank filed a motion to intervene in this action to protect its interest and/or to assert a claim against Acstar for its draw down of the $250,000 letter of credit originally issued by C & S Bank. The letter of credit was assigned to Highland Bank from C & S Bank. Because the trial court held that the underlying bonds were null and void and that the indemnity agreement failed for lack of consideration, the court simply ordered Acstar to refund all monies obtained pursuant to the nonexistent bonds. Because the indemnitors were the personal guarantors of the letter of credit and AMCI was directly obligated to Highland Bank for this indebtedness, AMCI and the indemnitors stipulated before the trial court that Highland Bank's claim to these funds was undisputed. Pursuant to this stipulation, the trial court awarded Highland Bank $276,250, the amount of the letter of credit plus legal interest. The basis for recovery in favor of Highland Bank was fundamentally the same as the basis claimed by AMCI: Just as AMCI was entitled to relief because the bonds were null and void, Highland was entitled to recover the funds improperly obtained by Acstar on the letter of credit on the same grounds. However, because we conclude that the trial court erred in holding that the bonds were null and void, we must logically conclude also that Highland Bank had no right to recover the letter of credit proceeds and that the judgment in its favor is also due to be reversed.