Skinkle v. American National Bank

KERRIGAN, J.

This is an appeal from the judgment rendered herein on the judgment-roll alone. The sole question involved is the proper construction of a guaranty agreement.

The facts as disclosed by the pleadings and findings are as follows: On the third day of August, 1915, one Thomas W. Butcher, being then the owner of certain real property sit

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uated in the city and county of San Francisco, conveyed the same on said day to the Cutting Packing Company, a corporation. At the time of the conveyance the property was subject to a lease for a period of five years from the first day of December, 1914, and the rent thereunder at the time of the conveyance and until the expiration thereof was five hundred dollars a month. By a written instrument executed at the same time as the deed, Butcher formally assigned to his grantee the rents due under the lease that had accrued subsequent to July 1, 1915. On the date of the sale and assignment, installments of rent accruing on the first day of July and on the first day of August, 1915, aggregating the sum of one thousand dollars, were due and unpaid, and the right thereto passed by the assignment to the grantee named. Contemporaneously with the execution of these instruments, one George Downing, the assignor of the plaintiff herein, executed and delivered to the Cutting Packing Company a written guaranty in respect to certain rents due under this lease. This instrument recited at length the terms of the lease and the assignment thereof, the extent of the liability thereunder, and also provided for the deposit of the sum of six thousand dollars with the American National Bank as security for the fulfillment of its terms, and authorized the bank upon receiving written notice from the lessor that any installment of rent was due from the lessees, to pay the same out of the moneys so deposited with it. Thereafter on the third day of November, 1915, the Cutting Packing Company notified the bank by a written communication that the installments of rent due under the lease for the months of July, August, September and October, 1915, were in default, and demanded payment of the same out of the said sum of six thousand dollars so deposited with it, and the bank thereupon paid the amount to the Packing Company. The present action was brought by the plaintiff as assignee of Downing, the guarantor, against the bank to recover one thousand dollars, being a portion of the amount so paid by the bank on account of the installments of rent for the months of July and August, 1915.