Moffett v. Miller

MUSSELL, J.

This is an action against defendants as guarantors of the payment of a promissory note payable to plaintiff and executed by ‘1 Role, Inc. ’ ’ Each of the defendants guaranteed to pay one-third of the amount of the note, which was for $5,000, and was due on August 7, 1951. The note was not paid at the time of maturity or thereafter except for the payment of $300 on account. After maturity of the note, plaintiff gave notice to Role, Inc., Mr. Frank Thomas, president of the corporation, and to all three guarantors that the note was overdue and that he wanted payment. There was no other effort made by plaintiff to collect from Role, Inc. The defendant guarantors made demand in writing upon plaintiff to sue or first pursue the principal (Role, Inc.). However, the corporation was not sued upon the note or made a party to the instant action, which was filed February 19, 1952.

After plaintiff had presented his evidence at the trial, the defendants moved for a judgment of nonsuit on the ground

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that the evidence showed that demand was made upon the payee of the note by the guarantors “to pursue the principal debtor for any action that was brought against them, and that such demand was rejected and no pursuit made.” This motion was granted and plaintiff appeals from the judgment of dismissal which was thereupon entered.

The question here involved was whether plaintiff was required, after demand made upon him by the guarantors, to proceed against the maker of the note before being able to secure a judgment against the guarantors. We conclude that this question must be answered in the affirmative.

The distinction between sureties and guarantors was abolished by the Legislature in 1939 by section 2787 of the Civil Code. Section 2807 thereof was amended in 1939 and now reads as follows:

“A surety who has assumed liability for payment or performance is liable to the creditor immediately upon the default of the principal, and without demand or notice.”

Section 2845 of the same code provides:

“ [Surety may require creditor to proceed against principal: Effect of neglect to proceed.] A surety may require his creditor to proceed against the principal, or to pursue any other remedy in his power which the surety can not himself pursue, and which would lighten his burden; and if in such case the creditor neglects to do so, the surety is exonerated to the extent to which he is thereby prejudiced.”