Dear Customer (name blocked for privacy).
The case is available at:
http://www.aoc.state.nc.us/www/public/coa/opinions/1997/960768-1.htm
Your question is answered below:
1. I need to know did was Doris correct when she refused pay the guartantee of credit stating that she was acting as a personal guarantor for her business and not for Blind Ambitions. Is she correct?
ANSWER
Generally, when a person signs a guarantee under their personal name it is a personal guarantee and he or she is liable for all debts under the loan his or her guarantee supports. In this case, Doris signed as "Doris Leeds DBA Blind Ambitions." Blind Ambitions is a sole proprietorship. A sole proprietorship is not an entity distinct from its owner as a corporation or LLC are. A sole proprietorship is the same as the person. Therefore, it was not the business debts that were guaranteed, it was the debts of Ms. Leeds that were guaranteed.
The debts Fabor wants repayment for were incurred by David and Judith Leeds DBA Blind Ambitions. Doris did not guarantee the debts of Blind Ambitions or David and Judith Leeds, she only guaranteed her personal debt. Because David and Judith Leeds incurred the debts Fabor is suing for Fabor cannot enforce Ms. Leeds' guarantee. It was Fabor's duty to update the guarantee to have David and Judith Leeds guarantee debts.
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