6 Cal. App. 2d 317 | Cal. Ct. App. | 1935
Lead Opinion
In July of 1923 Charles F. Wren and Stella F. Wren, the latter being appellant herein, executed and delivered to Merchants National Bank of Los Angeles a “continuing guaranty” to support the credit of the Pickwick Corporation, as follows: “You will please give credit to the Pickwick Corporation and permit them to become indebted to you on endorsements, overdrafts, acceptances or other liabilities in a sum in United States gold coin not exceeding the total amount of Fifty Thousand
From the findings of the trial court, which are not disputed, it appears that the Merchants National Bank made loans to the Pickwick Corporation on January 29, 1926, and thereafter; that on December 10, 1928, the Bank of America of California acquired the assets of the Merchants National Bank; that April 10, 1929, the loans of the Pickwick Corporation were paid in full; that October 9, 1929, Bank of America of California loaned Pickwick Coporation $100,000, which it increased to $300,000; that on November 1, 1930, the Bank of America of California consolidated with Bank of Italy National Trust & Savings Association to form the Bank of America National Trust & Savings Association; December 26, 1930, Pickwick Corporation paid $250,000 on account, and February 25, 1931, gave plaintiff a sixty-one-day note for the balance of $50,000; that $20,039.50 was paid on the principal, and the interest was, paid to October
This appeal, taken on the judgment roll, challenges the right of the successor in interest to the banking corporation which was the original recipient of the guaranty to enforce that guaranty, especially where, as in this case, the original obligation was paid up and there was a new extension of credit.
By the terms of the Bank Act in effect in July, 1923, when the guaranty was executed (Deering’s Gen. Laws, 1923, vol. 1, p. 180, sec. 31), the purchasing bank shall “ipso facto and by operation of law and without further transfer, substitution, act or deed and in all courts and places, be deemed and held to have succeeded and shall become subrogated and shall succeed to all rights, obligations, properties, assets, investments, deposits, demands, contracts, agreements, court and private trusts and other relations to any person, creditor, depositor”, etc. Plaintiff bank, as successor to the original obligee, became entitled to rely upon the continuing guaranty; and since by its terms that writing contemplated that the amount of the obligation would vary from time to time, the temporary extinction of the entire obligation of Pickwick Corporation to the bank would not cancel or reduce appellant’s liability to the bank on the guaranty as to new loans, there being no withdrawal of the guaranty by appellant nor any act of the bank which would preclude it from asserting its right to rely thereon. (Bank of America v. Granger, 115 Cal. App. 210 [1 Pac. (2d) 479]; Barriero v. Bank of Italy, 125 Cal. App. 153 [13 Pac. (2d) 1017]; Estate of Barnett, 97 Cal. App. 138 [275 Pac. 453]; Mercantile Trust Co. v. San Joaquin etc. Corp., 89 Cal. App. 558 [265 Pac. 583].)
Judgment affirmed.
Crail, J., concurred.
Dissenting Opinion
I dissent.
I am unwilling to lend my endorsement to the extension of the Bank Act so as to further nullify the principles of
A petition by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on June 18, 1935.
