- 25 -
material alteration of the obligations under that note.3 Nor did
that decision have any effect on the obligations of Mr. McDaniel
as a guarantor of the 1989 note.
On the instant record, we find (1) that there was no ma-
terial alteration in the nature or the time of payment of the
1989 note and (2) that the Bank did not consent to any such
alteration.4 We further find on that record that petitioners
have failed to establish that Mr. McDaniel was discharged in 1993
from his guaranty of the Second Street loan under section
620.735(3).
We turn next to petitioners' position that Mr. McDaniel was
discharged in 1993 from his guaranty under section 620.735(2).
Under that provision, petitioners must show that Mr. McDaniel was
discharged from his guaranty to the Bank by an agreement to that
effect among himself, the Bank, and Mr. Palermo. We have found
that petitioners have not met their burden of establishing that
Mr. Palermo agreed to assume Mr. McDaniel's share of the part-
3 The Bank made that decision because of the pending
bankruptcy proceeding of Mr. Parker, a general partner of Second
Street and another guarantor of the Second Street loan, and the
desire of NationsBank/Amresco to give Mr. Palermo, a valued
customer, the opportunity to come into compliance with the loan
terms as soon as Mr. Parker's bankruptcy proceeding was resolved.
4 Even if the terms of the loan had been altered, as noted
above, under the terms of his guaranty Mr. McDaniel's obligation
as a guarantor of the Second Street loan would not have been
affected by any such alteration.
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