City National Bank of Detroit v. Basic Food Industries, Inc.

This Florida diversity case concerns the validity of a written guarantee given by appellant Basic Food Industries, Inc. to City National Bank of Detroit. The guarantee was of a loan made by the bank to Grand Packing Company, a now-bankrupt subsidiary of Basic Food.

At trial, appellant Basic Food contended that it was discharged as guarantor because the original terms of the loan were modified without its consent. As an affirmative defense, it sought to establish that the Chairman of its Board of Directors, Allan Applestein, had not been authorized to negotiate and approve the amendment of the…