Hahn v. Walter

[838]

MOORE, P.

J.

The question for decision is whether the court committed prejudicial error in awarding judgment to respondents upon the promissory note of appellant and, at the same time, including in the judgment a portion of the amount due on another note guaranteed by appellant in a contract of guaranty executed contemporaneously by'appellant, respondents and other parties. The appeal-is based upon the contentions (1) that the court arbitrarily refused to delay the trial until service might be made of appellant’s cross-complaint upon all of the eight signatories to the guaranty agreement, and - (2) that the court refused to order a transfer to the superior court of an action pending in the justice court brought by Henry D. Lyman, one of the guarantors against appellant and his wife.

On May 1, 1938, respondents received three promissory notes in the sums indicated and from the following parties, to wit: (1) H. D. Lyman, $2,130; (2) Fred L. Walter and Pearle Walter, $3,199.77; (3) Harrison Baker (and comakers), $3,129.08; all payable three years after date. Contemporaneously therewith the Walters and the Baker group delivered to Lyman their notes for $461.88, and $499.54 respectively, and the Bakers delivered to Walter their note for $499.54. The notes all contain the customary provisions for interest, for acceleration in event of nonpayment upon failure to pay an installment of interest, and for attorneys’ fees. However, each note contains a clause reciting that it is subject to the provisions of a guaranty agreement of even date by the same parties.

The guaranty agreement contained two separate guaranties: (1) a primary guaranty and (2) a secondary guaranty. By the former, appellant and Lyman each guaranteed the payment of one-fourth of the B'aker note. By the secondary guaranty appellant guaranteed the payment of one-third of the Lyman guaranty, that is to say, one-third of one-fourth of the Baker note. The Baker note was not paid. Neither did Lyman pay the amount of his guaranty thereof. Excepting certain set-offs the action went to trial with appellant indebted on his own note, on his one-fourth guaranty of the Baker note, and one-twelfth of the same note by reason of Lyman’s failure to pay his one-fourth of the Baker note. But respondents’ debt to appellant by reason of their guaranty of the Baker note was two-thirds of the $499.54, which respondent, by the secondary guaranty agreed to pay. Although