Shelby Elec. Co., Inc. v. Forbes

OPINION

in which W. FRANK CRAWFORD, P.J., W.S., and ALAN E. HIGHERS, J., joined.

This is an action to enforce a commercial guaranty. The defendants were both 25% shareholders in the plaintiff corporation. They each signed a guaranty on a $70,000 line of credit issued to the corporation. Subsequently, two other shareholders of the corporation drew down $50,000 from the line of credit without notifying the defendant guarantors or the corporation’s board of directors. Two days later, the guarantors resigned from the corporation. Within weeks, the two other shareholders who drew the money from the…