The hospitals seek to bypass this issue by claiming under the guarantees as well as under the contract; the guarantees contain no limit. But either the guarantees are of the Greek government's performance under the contract, and therefore are subject to any payment ceiling in the contract, or they are separate contracts and therefore require consideration. Continental National Bank v. Schiller, 89 Ill.App.3d 216, 44 Ill.Dec. 471, 411 N.E.2d 593 (1980). The latter possibility requires us to distinguish between guarantees issued before and after the contract was signed.
II. DISCUSSION Acceleration clauses are widely recognized and enforceable under Illinois law. Continental Nat'l Bank v. Schiller, 89 Ill. App.3d 216, 44 Ill.Dec. 471, 473, 411 N.E.2d 593, 595 (1980) (acceleration of an installment loan); Plasti-Drum Corp. v. Ferrell, 70 Ill.App.3d 441, 26 Ill.Dec. 723, 731, 388 N.E.2d 438, 447 (1979) (acceleration of a promissory note); Curran v. Houston, 201 Ill. 442, 66 N.E. 228 (1903) (acceleration of a deed of trust note). An acceleration clause sets the damages due at the time of default as the amount attributable to the principle in the remaining periodic payments.
There is no question that under Illinois law parties can enter into contracts to guarantee another's pre-existing debt for additional consideration. See Cant'l Nat'l Bank of Fort Worth v. Schiller, 89 Ill. App.3d 216, 219 (3d Dist. 1980). Accordingly, the Court denies defendants' Rule 12(b)(6) motion to dismiss Count I.
In any case Citibank asserts (see n. 4) Fishman was in default on the earlier guaranty when he executed the Guaranty. If consideration had to flow to him directly in the Guaranty, it plainly did so. Moreover Fishman's Guaranty was part of the loan renewal transaction represented by the Note — it did not guarantee a "preexisting debt." See Continental Nat'l Bank of Fort Worth v. Schiller, 89 Ill. App.3d 216, 219-20, 44 Ill.Dec. 471, 474-475, 411 N.E.2d 593, 596-97 (3d Dist. 1980). Fishman raises one additional argument that does his cause little good — that the Guaranty is defective on its face because he guarantees loans to Beatcat Tire A.G. in which he has "no holdings or interest," Mem. 6, "not Bearcat Tire A.G."
The court then applied the long-standing principle of law that when one person promises to guarantee or pay the antecedent debt of another, some new consideration is necessary to support the promise, such as the creditor's agreement to release the debtor or grant forebearance of some kind. That principle is a corollary to the rule that a contemporaneous guaranty of a third person's debt does not need independent consideration. L.D.S., LLC v. Southern Cross Food, Ltd., 2011 IL App (1st) 102379, 352 Ill.Dec. 613, 954 N.E.2d 696, 708 ; Continental Nat. Bank of Ft. Worth v. Schiller, 89 Ill.App.3d 216, 219, 44 Ill.Dec. 471, 411 N.E.2d 593 (Ill.App. 3 Dist. 1980). The Leaf River court also recognized that the new consideration need not flow to the third party, as it is sufficient that the original debtor alone be benefitted, by release or forebearance.
An actual intent to waive the requirement for timely payment, or to waive the contractual right to declare a default without notice, as provided for in their agreement, must be implied from the parties conduct in the performance of that obligation. Cf. Continental Nat'l Bank of Fort Worth v. Schiller, 89 Ill. App.3d 216, 44 Ill.Dec. 471, 411 N.E.2d 593 (1980) (evidence that bank had accepted late payments on earlier debts insufficient to show a waiver, express or implied, of timely payments on present debt). Otherwise the express terms of the agreement would have no meaning at the time of its execution.
However, if a guaranty is executed contemporaneously with the original contract, the consideration for the original contract is sufficient consideration for the guaranty and no new consideration is required for the guaranty. Tower Investors , 371 Ill. App. 3d at 1028, 309 Ill.Dec. 686, 864 N.E.2d 927 ; Pedott v. Dorman , 192 Ill. App. 3d 85, 94, 139 Ill.Dec. 156, 548 N.E.2d 541 (1989) ; Continental National Bank of Fort Worth v. Schiller , 89 Ill. App. 3d 216, 219–20, 44 Ill.Dec. 471, 411 N.E.2d 593 (1980) ; Vaughn v. Commissary Realty, Inc. , 30 Ill. App. 2d 296, 302, 174 N.E.2d 567 (1961).¶ 37 In the case at bar, the trial court found that the guaranty was executed after the lease agreement had been executed and therefore required new consideration to be enforceable.
" (Internal quotation marks omitted.) Continental National Bank of Ft. Worth v. Schiller, 89 Ill. App. 3d 216, 219 (1980). "If the promise of the guarantor is shown to have been given as part of a transaction or arrangement which created the guaranteed debt or obligation, it is not essential to a recovery on the promise of guaranty that the promise shall have been supported by consideration other than that of the principal debt-that is, one and the same consideration may suffice for both contracts where the contract of guaranty has been entered into at the time of creation of the principal obligation."
However, if a guaranty is executed contemporaneously with the original contract, the consideration for the original contract is sufficient consideration for the guaranty and no new consideration is required for the guaranty. Tower Investors, 371 Ill. App. 3d at 1028; Pedott v. Dorman, 192 Ill. App. 3d 85, 94 (1989); Continental National Bank of Fort Worth v. Schiller, 89 Ill. App. 3d 216, 219-20 (1980); Vaughn v. Commissary Realty, Inc., 30 Ill. App. 2d 296, 302 (1961). In the case at bar, the verified second amended complaint contains allegations that the lease and the guaranty were executed contemporaneously as part of a single "lease transaction," despite the fact that the guaranty was executed six days after the execution of the lease.
• 9, 10 Finally, as neither defendant, plaintiff, nor CNB rebutted the presumption of consideration, judgment was properly entered against defendant as CNB's guarantor. Where a guaranty is executed contemporaneously with an original note or obligation, the consideration for the note or obligation furnishes sufficient consideration for the guaranty. ( Continental National Bank v. Schiller (1980), 89 Ill. App.3d 216, 411 N.E.2d 593; First National Bank v. Chapman (1977), 51 Ill. App.3d 738, 366 N.E.2d 937.) As such, a guarantor is liable on a note even though he does not receive the consideration flowing from the payee.