SAHADI V. CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO
706 F.2d 193 (1983)
NATURE OF THE CASE: Sahadi (P) appealed a partial summary judgment for Bank (D) in P's
breach of contract suit after D called a loan one day after interest payments on the loan
were due.
FACTS: GLE, an international shipping line, began its relationship with D in 1976 with a
$3 million loan, personally guaranteed by P. D increased its loan commitment to $11 million
in 1977. This commitment was repudiated by D. Negotiations ensued and D primarily sought to
obtain release from P and GLE of their claims stemming from D's purported breach of its loan
commitment, and to obtain further collateral from P to secure their guarantee of the
outstanding loan. D also sought to have GLE's outstanding interest payments brought up to
date. Two agreements were executed. One ran between P and D, completely releasing D from
any claims stemming from its failure to fulfill the loan commitment; it also collateralized
P's guarantee of D's outstanding loan to GLE. The other agreement, cross-referenced to the
first and running between GLE and D, provided for the payment of interest and for D's
forbearance from demanding payment of the entire outstanding loan and accrued interest. As
part of the second agreement D had the right to demand payment in full if GLE failed to make
payment of interest accrued on the Liabilities through September 30, 1977 on or before
November 15, 1977. Underlying these agreements, D clearly wanted to call in the loan if the
interest payments were late. GLE was late and D notified that the loan was called. GLE
immediately offered to tender payment for the due interest from the company's account with
D, but D refused. The calling of the loan destroyed GLE and subjected P to liability on the
personal guarantee. P filed suit against D, seeking release from their personal guarantee
agreement and damages for the destruction of GLE. The district court gave D a partial
summary judgment and rejected P's waiver argument, but did not directly address their
'material' breach or 'good faith' contentions, either of which, P argued, required a trial
to assess the confliction evidence. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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