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United States v. Meadors

United States Court of Appeals for the Seventh Circuit
753 F.2d 590 (1985)



In January 1977, M.J.D., Inc. (MJD) applied for a loan. MJD’s principals were Melton Meadors, Jay Judd, and Harold Ducote. The bank approved the loan subject to a guaranty by the Small Business Administration (SBA) (plaintiff). In April 1977, the SBA approved a 56% guaranty, but required MJD’s principals, plus Ducote’s wife, to back it with a guaranty. On April 2, 1977, Betty Jo Meadors (Betty) (defendant) married Melton Meadors. At the loan’s closing on April 19, 1977, Melton Meadors, Jay Judd, Harold Ducote, and the three men’s wives were present. No representative of the SBA was present. On the SBA guaranty form to be filled out, there was space for four signatures that the SBA had stated it was going to require: the three principals and Ducote’s wife. Nevertheless, all six attendees, including Betty, signed the guaranty. MJD defaulted on the loan, and the SBA brought suit to obtain payment from the guarantors, including Betty. Betty claimed she should not be a named defendant because her signature lacked consideration, among other defenses. The SBA moved for summary judgment on that issue and the district court granted the motion. Betty appealed.

Rule of Law


Holding and Reasoning (Cudahy, J.)

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