First National Bank of Unadilla, Countryside Bank v. Jack D. Betts

Summary

The Nebraska Supreme Court addresses whether a father's guaranty of his son's loan continued after the loan was renewed and consolidated with another obligation. The court held that the borrowers met the guaranty's specified creditworthiness standard, so newly advanced indebtedness was not covered, but the guaranty continued to secure the $5,636.74 outstanding principal from the original loan. The court affirmed in part, reversed in part, and remanded with directions to enter judgment for the bank in that amount plus interest.

Holdings

1. Brad and Elizabeth met the guaranty's creditworthiness standard when they executed Note #9224 because their assets and income demonstrated creditworthiness without the addition of a guaranty.
2. Note #9224 did not subject Jack to liability for new indebtedness incurred on the borrowers' own creditworthiness, but it also did not extinguish Jack's existing liability of $5,636.74 because that amount had not been fully paid and discharged.

Questions Presented

1. Whether Brad and Elizabeth Betts met the creditworthiness standard in Jack's guaranty when they executed the May 2000 note.
2. Whether the May 2000 note extinguished Jack's liability under the guaranty for the existing balance of the 1998 note.
3. Whether the district court properly reversed the county court's judgment and entered judgment for Jack.

Disposition

reversed_and_remanded