A stockholder’s signature on a corporate credit application containing a guarantee clause creates a personal obligation, as the language is not ambiguous and a corporation cannot guarantee its own debt.
A principal stockholder signed a credit application for his corporation containing a clause requiring a stockholder to guarantee payment. When the corporation defaulted, the creditor sued the stockholder personally. The stockholder argued the writing was ambiguous and testified he intended to sign only in his corporate capacity. The trial court accepted this testimony and found no personal liability. The appellate court holds that the guarantee language is not ambiguous as a matter of law because a corporation cannot guarantee its own obligation. Consequently, the stockholder’s signature necessarily constituted a personal guarantee of the debt, making his testimony regarding subjective intent inadmissible.
Other citing cases
- Keith Pearce v. State Farm Florida Ins. Co., No. 23-14081 (11th Cir. Apr. 21, 2026).unpublished
- Lab'y Corp. of Am. v. McKown, 829 So. 2d 311 (Fla. 5th DCA 2002).published
v.
James E. FOSHEE, Appellee.
Jeffrey S. Goldman of Hayt, Hayt & Landau, Orlando, for appellant.
James E. Foster and William M. Lindeman of Foster & Kelly, Orlando, for appellee.
COWART, Judge.
Shee-Con, Inc. applied for a line of credit with Roquemore Oil Company, the predecessor corporation of appellant Ross Oil Corporation. James E. Foshee was an officer and principal stockholder in Shee-Con, Inc. The following paragraph was appended to the written credit application:
When Shee-Con, Inc. failed to pay the creditor corporation (Ross Oil Corporation), Ross Oil Corporation sued James E. Foshee personally under the above-quoted guarantee language. Foshee defended on the basis that the writing was ambiguous. The trial court in a non-jury trial permitted Foshee to testify that when he signed as shown above, he intended to do so only as an officer of Shee-Con, Inc. and did not intend to obligate himself personally. The trial court found as a matter of fact that Foshee did not intend to guarantee personally the debt of Shee-Con, Inc. and entered final judgment against the creditor corporation which brings the appeal.
[*714] We reverse and hold as a matter of law that the above-quoted language is not ambiguous and that it was error to permit Foshee to testify that he did not intend to be personally obligated. The debtor corporation, Shee-Con, Inc., was not a stockholder in its corporate self and, in any event, could not guarantee its own obligation. As a matter of law the language quoted above means nothing unless it means that any stockholder signing below was guaranteeing payment of credit extended by the creditor corporation (Roquemore Oil Co. and subsequently Ross Oil Corporation) to the debtor corporation Shee-Con, Inc.
The final judgment in favor of James E. Foshee is reversed and the cause remanded with directions for the trial court to enter an appropriate judgment in favor of Ross Oil Corporation and against James E. Foshee on Foshee's written guarantee of credit extended to Shee-Con, Inc.
REVERSED and REMANDED.
COBB and SHARP, JJ., concur.