Manuel v. Hicks Iron Works

THE COURT.

This is an action by one of several guarantors of a promissory note, against the maker and other guarantors, to recover on the same after payment. On December 17, 1920, defendant Hicks Iron Works executed the note in question, for the sum of $12,881, to Portuguese American Bank of San Francisco, payable on demand. At the same time a guaranty was executed on the back of the

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note by seven persons: Plaintiff Manuel, defendants Bandy, Scott, Demarest, Solinsky and Levy, and P. George Gow, now deceased. On February 25, 1922, the note was assigned to Pacific Securities Corporation, without recourse. It was not paid by the maker. Gow having died on June 8, 1921, a claim was presented against his estate. On December 7, 1922, plaintiff Manuel paid the entire amount of the principal and accrued interest, and took an assignment of the note from Pacific Securities Corporation, together with an assignment of the claim against the estate of Gow. O'n December 12, 1922, defendant maker executed to plaintiff a chattel mortgage upon certain of its property, as additional security; and on the same day, all of the other guarantors save the deceased Gow signed an agreement acknowledging their continued liability on the note.

On December 12, 1924, plaintiff commenced this action against the other living guarantors and Wells Fargo Bank & Union Trust Co., executor of the estate of Gow, seeking recovery of the principal and interest thereof, together with costs and attorney’s fees. By amended complaint foreclosure of the mortgage was sought. A demurrer by defendant Scott was overruled, as was his motion to strike. Several other defendants filed answers. At the trial it appeared that the mortgaged property had no realizable value, and judgment was entered as follows: Against defendant Hicks Iron Works, maker of the note, for $26,211.44, principal and interest, and $1,000 attorney’s fees; against the other guarantors and the executor of the estate of Gow, each for one-seventh of the amount of the said judgment. Defendants Scott and Wells Fargo Bank & Union Trust Co. appealed. The maker and the other nonappealing defendants are apparently insolvent.

It is contended by appellants that when plaintiff paid the note, the obligations represented by it and by the contract of guaranty were extinguished, and that plaintiff’s sole remaining right against the other guarantors was upon their implied obligation to contribute in proportion to their liability, under the rule of such cases as