Court Opinion

ID: 9578424
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:45:08.25078+00
Date Added: 2024-06-11T13:25:05.694924
License: Public Domain

JUSTICE ROVIRA
dissenting:
I respectfully dissent. The language of the guaranty agreement executed by Gandy permits the extension of the date of payment of the *302guaranteed promissory note. By extending the date of payment, the respondent did not create a new indebtedness. Rather, it took a course of action affecting the existing indebtedness, clearly contemplated by the guaranty contract.
Conclusions as to the scope of a guaranty agreement must be based on the language of the particular agreement. In this case, the authority given to the respondent bank in paragraph 4 of the guaranty agreement to “renew, compromise, extend, accelerate, or otherwise change the time for payment” is to be read in conjunction with paragraph 1, which defines “indebtedness,” and paragraph 2, which provides that the guaranty relates to “any indebtedness, including that arising under successive transactions which shall either continue the indebtedness or from time to time renew it after it has been satisfied.”
My reading of the agreement leads to the conclusion that a new “indebtedness” was not created when the respondent extended the note, for to create means “to bring into existence: make out of nothing and for the first time.” Webster’s Third New International Dictionary (1971). Further, the funds were borrowed by the mortgage company before the letter of revocation was issued by Gandy. Extensions of the existing notes were made as contemplated by the guaranty agreement, but these extensions continued the prior obligation and did not create any new obligation.
I cannot agree with the majority opinion in its attempt to distinguish First New Jersey Bank v. F.L.M. Business Machines, Inc., 130 N.J. Super. 151, 325 A.2d 843 (1974). In that case, the guaranty agreement provided that the guarantor “shall nevertheless remain liable with respect to the aforesaid Obligations . . . and any renewals, extensions, or other liabilities arising out of the same.” Id. 130 N.J. Super, at 156, 325 A.2d at 846. The majority finds no similar language in the guaranty agreement involved in this case, but, in my view, a fair reading of that agreement leads to the conclusion that Gandy authorized renewals and extensions of the note and guaranteed the payment of the indebtedness as it would from time to time be continued or renewed. I would affirm.