CASE 14.2 Guaranty Contract:Page v. Gulf Coast Motors 903 So.2d 148, Web 2004 Ala. Civ. App. Lexis 982 (2004) Court of Civil Appeal of Alabama A promise to pay the debt of another is barred by the Statute of Frauds unless it is in writing. Judge Murdock Facts Glenn A. Page (Glenn) had a long-term friendship with Jerry Sellers, an owner of Gulf Coast Motors. Glenn began borrowing money from Gulf Coast Motors on a recurring basis during a two-year period. The loan process was informal: Gulf Coast Motors set up a ledger account and recorded each loan made to Glenn, and Glenn would sign the ledger I agree to pay Jerry Sellers as above. At various times, Glenn would make small payments toward his account, but he would thereafter borrow more money. At the times the loans were made, Glenn was not working and had no assets in his own name. There was no evidence as to what Glenn used the loan proceeds for, but evidence showed that he had a gambling problem. Sellers testified that toward the end of the two-year period of making loans to Glenn, he telephoned Mary R. Page, Glenns wife, and Mary orally guaranteed to repay Glenns loans. Mary had significant assets of her own. Mary denied that she had promised to pay any of Glenns debt, and she denied that Sellers had asked her to pay Glenns debt. Gulf Coast Motors sued Glenn and Mary to recover payment for the unpaid loans. The trial court entered judgment in the amount of $23,020 in favor of Gulf Coast Motors. Mary appealed. Issue Was Marys alleged oral promise to guarantee her husbands debts an enforceable guaranty contract? Language of the Court A promise to pay the debt of another is barred by the Statute of Frauds unless it is in writing. It is not disputed that Mary did not sign a note, guaranty, or any other writing promising to pay any part of Glenns debts. Therefore, if the purported agreement to pay Glenns debt is within the Statute of Frauds, Mary is not liable even if the trial court found Sellers testimony to be credible. Marys alleged oral promises are not enforceable under the Statute of Frauds. We conclude that Marys alleged promises to guaranty or repay Glenns debts were within the Statute of Frauds and, therefore, were not enforceable. Decision The court of civil appeals held that Marys alleged oral promises to guarantee her husbands debts were not in writing, as required by the Statute of Frauds. The court remanded the case to the trial court to enter judgment in Marys favor. Case Questions Critical Legal Thinking What is a guaranty contract? Explain. Business Ethics Did Glenn act ethically in this case? Would Mary have acted unethically if she had actually orally guaranteed to repay her husbands debts and then raised the Statute of Frauds to prevent enforcement of the oral promises? Contemporary Business Are guaranty contracts often used in business? Can you think of a situation in which a guaranty contract would be required?

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   8. Conclusion[This should summarize the key aspects of the decision and also your recommendations on the court's ruling.]
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