Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 19

Guaranty.Timothy Martinez, owner of Koenig Vits, Inc. (K V), guaranteed K V 's debt to Community Bank Trust. The guaranty stated that the bank was not required to seek payment of the debt from any other source before enforc ­ing the guaranty. K V defaulted. Through a Wisconsin state court, the bank sought payment of $536,739, plus interest at the contract rate of 7.5 percent, from Martinez. Martinez argued that the bank could not enforce his guaranty while other funds were available to satisfy K V's debt -for exam ­ ple, the debt might be paid out of the proceeds of a sale of cor ­ porate assets. Is this an effective defense to a guaranty Why or why not [Community Bank Trust v. Koenig Vits, Inc.,346 Wis.2d 279 (Wis.App. 2013)]