Gottschalk v. Draper Companies

Opinion

KANE, J.

Defendants, The Draper Companies et al., appeal from a summary judgment ordering them to pay respondents certain amounts due on written guaranties of two promissory notes.

A brief summary of relevant facts discloses that respondents (vendors of real property) held two promissory notes executed in their behalf by the buyer Peacock Gap, Inc., a California corporation (hereafter Peacock). The notes were secured by purchase money deeds of trust also executed by Peacock. These trust deeds, however, were junior to another encumbrance on the same property. As a part of the original sale transaction, appellants unconditionally guaranteed all payments falling due

[830]

under the two promissory notes. As the result of a foreclosure sale by the trustee of the senior deed of trust, respondents’ security for the two notes was extinguished.

Since a deficiency judgment was not available against Peacock, the defaulting original buyer (Code Civ. Proc., § 580b), respondents brought this suit upon the written guarantees against appellants. Respondents’ motion for summary judgment, asserting that there was no defense to the action, was granted.

The only issue presented to the trial court and now to us is whether or not appellants’ alleged affirmative defense based upon Civil Code section 2810 created a triable issue of fact.

(1) In discussing the contentions of the parties, initially we point out that a guarantor of a purchase money transaction in which another individual or legal entity is primarily liable is not protected by the provisions of Code of Civil Procedure section 580b.

1

(Roberts

v.

Graves

(1969) 269 Cal.App.2d 410, 415 [75 Cal.Rptr. 130].) The protection afforded by this code section is confined to the purchaser-debtor’s obligation which is secured by the purchased property. The guarantor’s obligation is not within this delineation, is not secured by the property, and is not the debtor’s obligation. The guaranty is, simply an additional security for the obligor’s debt and is enforceable against the guarantor