Opinion ID: 2289811
Heading Depth: 1
Heading Rank: 1

Heading: The trial court should have granted the Greenwells' motion for summary judgment as a matter of law.

Text: The Greenwells bottom this argument on the contention that once American Guaranty added freight charges of $648.00 to the cost of the equipment, and made a commensurate increase in the monthly rent, a material modification had been made to the lease without their knowledge or consent, which, as a matter of law, released them from liability under the agreement of guaranty. This is a completely tenable argument which may be advanced by an uncompensated guarantor who has not consented to modification of his contract of guaranty, Restatement, Security § 128 at 340 (1941). See also, W.B. Saunders Co. v. Ducker, 116 Md. 474, 82 A. 154 (1911), which invoked the doctrine of strictissimi juris, and the discussion in A/C Electric Co. v. Aetna Ins. Co., 251 Md. 410, 247 A.2d 708 (1968). It will be recalled that the Greenwells, in the agreement which they signed, waived their right to notice and demand in the event of default and further agreed that any extension or modification granted to [American Plastic] shall not release the liability of the guarantors. The Greenwells argue that the addition of the freight charge was not a modification granted to American Plastic, but rather a modification granted by American Plastic to American Guaranty, which was not encompassed by the terms of the consent. We are inclined to share the view of the trial court that the addition of the freight charge was not a modification at all. Attached to the lease, and incorporated by reference, was a letter proposal from The Producto Machine Company to American Plastic dated 21 June 1961 quoting prices of the molding equipment which concluded: TERMS To be arranged F.O.B. our plant floor Bpt. Conn. [Bridgeport, Connecticut]. A somewhat similar contention was before us in Gordon v. State National Bank of Bethesda, 249 Md. 378, 239 A.2d 915 (1968), where the Gordons, in August 1965, agreed that: IN CONSIDERATION of a loan in the amount of $30,000 made or to be made    we    do hereby    guarantee    the prompt payment    of said note or notes    in whole or in part    A year later, the debtor borrowed $19,000.00 and then defaulted. In holding the Gordons liable, we quoted from Walton v. Washington County Hospital Ass'n, 178 Md. 446, 450, 13 A.2d 627 (1940): `A contract of guaranty is a form of commercial obligation, which should be construed in furtherance of its spirit, without strict technical nicety, to promote liberally the use and convenience of commercial intercourse. The words of a guaranty should receive a fair and reasonable interpretation to effectuate the intention of the parties, and the circumstances accompanying the transaction may be considered in seeking the intention of the parties. The court should give the instrument that construction which will best accord with the intention, as manifested by the language in the light of all the surrounding circumstances, without stretching the words beyond their import in favor of the creditor or restricting them in aid of the guarantor.' and concluded: If this test is applied to the instrument before us, it is obvious that the intent and purpose of the Gordons was to guarantee, until such time as they gave written notice that no further advances were to be made, any indebtedness which Frontiers might incur at the Bank up to a maximum principal sum of $30,000, whether the debt was evidenced by one note or several. 249 Md. at 384. An analogous situation is present here. It is manifest that the agreement which the Greenwells signed was intended to give American Plastic a free hand in dealing with American Guaranty and that no modification of the terms of the arrangement would have relieved the Greenwells of an obligation which was intended to be without limit as to either duration or amount. See 38 C.J.S. Guaranty § 73 at 1238 (1943). The decision in Plunkett v. Davis Sewing Machine Co., 84 Md. 529, 36 A. 115 (1897), relied on by the Greenwells, is only obliquely apposite because there, an uncompensated guarantor who had agreed that a sales agent's contract could be modified in writing as to terms, prices or territory, was discharged from his obligation when there was an oral modification of the contract.