Court Opinion

ID: 9606290
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:48:46.651374+00
Date Added: 2024-06-11T08:03:45.471403
License: Public Domain

WOOD, Chief Judge (specially concurring): I agree that the trial court properly directed a verdict in favor of Wood on the economic compulsion claim; I agree that the Bank gave Wood no alternative in requiring execution of the guaranty before renewing Wood’s loan. The evidence is undisputed that if Wood did not execute the guaranty, the Bank would call the loan.  This special concurrence is directed to the Bank’s claim that it had a legal right to require the guaranty. See Terrel v. Duke City Lumber Company, Inc., 86 N.M. 405, supra, at 419, 524 P.2d 1021. Pursuant to the written loan commitment, signed by the parties, Wood had a line of credit to the maximum amount of $500,000. Wood began borrowing money in 1971. The loan was reviewed and renewed every six months. Wood used the money in connection with his cattle operations. Because of the amount of the loan, the Bank did not expect the loan to be paid off when the six-month note matured. The ordinary procedure was that the note was renewed after a review of Wood’s financial condition and operations during the preceding six months. In 1974, the cattle market was severely depressed, resulting in loss in value of the cattle securing the loan. In June, 1974, the Bank imposed conditions for renewal, including the sale of some assets in order to reduce the amount of the loan. These conditions were consistent with, and permissible under, the written agreement of the parties. Wood met those conditions. Nevertheless, the Bank refused to renew the loan unless Wood also executed the agreement which guaranteed $20,000 of the son’s indebtedness, for which Wood was not liable. There is nothing in the written loan commitment which gave the Bank the legal right to require the guaranty as a condition for renewing the loan, and there is nothing in the trial testimony that supports such a legal right. The Bank added the guaranty requirement without any legal right to do so. HERNANDEZ, J., concurs.