Perry v. Cassidy

SCHOTTKY, J.

Mildred Cassidy appeals from a judgment finding her liable on a contract of guaranty.

On January 7, 1957, Percy Cassidy, the husband of appellant Mildred Cassidy, borrowed $15,000 from the Central Valley National Bank. Cassidy executed a note in favor of the bank for the sum due. This note was payable on demand, or if no demand, then on March 7, 1957. The funds received were deposited to a commercial account in the name of Percy Cassidy or Mildred Cassidy. On March 11, 1957, the bank manager told Percy Cassidy that the note would have to be paid or a substantial reduction made on it. Percy Cassidy then suggested that the bank make another loan to Percy on an automobile he owned. The bank manager agreed if Mrs. Cassidy would execute a continuing guaranty in the sum of $15,000. Percy Cassidy secured appellant’s signature on the guaranty and returned it to the bank. The loan was made on the auto

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mobile in the amount of $1,500 and the proceeds applied on the $15,000 note. Thereafter the auto loan was paid, and the $15,000 note was assigned to plaintiff Perry who brought this action against the Cassidys to recover the balance due on the note. A judgment in Perry’s favor was rendered against the Cassidys. Only Mildred Cassidy has appealed.

Appellant’s sole contention upon this appeal is that the court erred in finding that the contract of guaranty executed by her was supported by a good and sufficient consideration.

In the instant case by the terms of the “Continuing Guaranty” it is expressly stated that said contract was executed for a valuable consideration and by its terms sets forth that the “. . . Guarantors . . . unconditionally guarantee and promise to pay to Central Valley National Bank [plaintiff’s assignor], . . . any and all indebtedness of Percy Cassidy . . .” and by the terms of said contract it is specifically set forth that the indebtedness referred to in the guaranty “. . . includes any and all advances, debts, obligations and liabilities of the Borrowers or any one or more of them, heretofore, now, or hereafter made, incurred or created . . .”

Here the bank told Percy Cassidy it would lend him money on his automobile if he would obtain a contract of guaranty from Mrs. Cassidy. When the contract of guaranty was presented to the bank, the loan was made. The bank delayed further action to enforce the payment of Percy Cassidy’s note for a period of four months. By making the loan the bank suffered detriment. By its terms the guaranty extended to loans heretofore, now or hereafter made. The loan would be consideration for the contract of guaranty, and the consideration would extend to the prior loan.