Home Pros Realty Corp. (Home Pros) is owned by Rihan. In order for Home Pros to make a purchase from Assevero, Rihan was required to sign a personal guarantee. Eventually, Home Pros defaulted on the debt, and Assevero sued Rihan to enforce the note pursuant to the personal guarantee. Assevero submitted proof of the underlying note, a personal guarantee bearing Rihan’s signature, the failure of Home Pros to make payment in accordance with the terms of the note, and Rihan’s failure to make payment in accordance with his personal guarantee.

Rihan defended on the basis that he erroneously signed the promissory note that should have been signed only in the name of Home Pros.

CASE QUESTIONS

1. Who prevails and why?

2. Is Assevero a secured creditor? Explain.