184 P. 52 | Cal. Ct. App. | 1919
Action on a contract of guaranty. Plaintiff and defendants were the directors of the California Rochdale Company, a corporation. Defendants guaranteed the payment to plaintiff of a promissory note of said company in the sum of five thousand dollars, which amount was subsequently reduced by payments made thereon to $4,132.20, the amount sued for herein. The contract of *782 guaranty was written on the back of the note, and was signed by the five defendants contemporaneously with the execution of the note. After the maturity of the note the California Rochdale Company transferred all of its assets to a trustee for the benefit of its creditors. Subsequently a settlement was effected with some of the creditors, leaving the corporation indebted to the plaintiff and to certain other creditors. Thereafter, with the consent of the corporation and of such remaining creditors, and with the consent of the defendant Heisinger, said trustee transferred the assets then remaining in his hands to a committee of three, consisting of the plaintiff, the defendant Heisinger, and the defendant Bennett, which transfer was found to have been made in trust for the benefit of such remaining creditors. The trial court rendered judgment in favor of plaintiff and against defendants, all of the defendants having defaulted except Heisinger and Bice, from which judgment the non-defaulting defendants prosecute this appeal. The defenses of each of the defendants were: First, that he had signed the contract of guaranty in reliance upon a prior agreement of plaintiff to the effect that if the five defendants would sign the same, plaintiff would stand hispro rata share of any loss that might be occasioned to them by reason thereof; second, that, without the consent of the guarantors, plaintiff had released the maker of the note from all liability thereon; and, third, that, after the execution of the contract of guaranty, the California Rochdale Company, with the consent of the plaintiff, but without the consent of the guarantors, transferred all of its assets to one Smith as trustee for the benefit of its creditors, and that thereafter the plaintiff, without the consent or knowledge of the guarantors, executed a waiver in writing of all his rights as holder of the note to participate in the assets of said corporation. [1] At the close of the trial the court granted plaintiff's motion to strike out the testimony of certain witnesses by which defendants attempted to prove an oral agreement between plaintiff and defendants that plaintiff would stand his pro rata share of any loss that might be suffered by them by reason of said guaranty, hereinabove referred to in the first defense; and in accordance with the remaining evidence found that no such agreement had been made. *783
We cannot agree with appellants' contention that this ruling was erroneous. If there was any conversation regarding such an agreement, it was inadmissible, as the contract sued upon was in writing, was complete in itself, and superseded all negotiations or conversations which preceded or accompanied its execution. [2] Appellants do not attempt to dispute the well-established rule that parol evidence is inadmissible to vary the terms of a written instrument. They argue, however, that plaintiff is estopped from enforcing his contract of guaranty because of the oral agreement which they claim he entered into; that if he made such oral agreement without intention of fulfilling it, it constituted fraud in the procurement of the contract of guaranty, which would preclude its enforcement. There is no merit in this contention. Fraud as a defense must be pleaded and proved. This defendants have not done.
[3] Appellants further claim that the introduction of parol testimony to establish this oral agreement was not an attempt to vary the terms of a written contract, but that it evidenced another collateral agreement, which constituted a part, of the consideration for the execution of the contract of guaranty. If such an agreement were made, it would have amounted to nothing more than a contract of guaranty of the debt of another, which would not have been enforceable unless in writing. The cases cited by appellants do, not bear out their contention in this regard. [4] Nor would such an agreement constitute a counterclaim against plaintiff's cause of action, as claimed by appellants, for the reason that the agreement pleaded and attempted to be proved was to "stand his pro rata share of any loss that might be occasioned said defendant by reason of his becoming the guarantor of said note." The record contains no allegation nor proof that appellants have as yet suffered any loss by reason of their guaranty. They had, therefore, no "existing" cause of action against plaintiff under such alleged agreement, as is required by section
[5] The trial court found that "the plaintiff did not at any time . . . release the California Rochdale Company from liability on the, note referred to in said complaint or from any part of its' liability on said note." Appellants' contention that plaintiff released the corporation "or its representative Smith" from its obligation upon the note is unwarranted. Smith was the trustee for the creditors. The California Rochdale Company passed a resolution authorizing and directing defendant Heisinger, president of the corporation, upon acceptance of a certain compromise settlement by a majority in number and amount of its merchandise creditors, to deliver to said Smith a copy of said resolution, "which is hereby constituted an authority and instruction to H. L. Smith to retransfer to F. A. Bennett, S. L. Heisinger, and W. J. McClendon, or their nominees, all of the assets heretofore transferred to him by, the California Rochdale Company." Plaintiff and Heisinger, as creditors of said corporation, each executed a release to Smith for all claims and demands which he "has or may have against said H. L. Smith on account of the aforesaid transfer of assets, and does hereby consent that said H. L. Smith may transfer said assets and property" to said parties. This release does not purport to be a release of the corporation, or anyone else, from any obligation under the note in suit, nor a waiver by plaintiff of any rights thereunder. This is the only release in evidence. Reliance is placed upon section
The judgment is affirmed.
Langdon, P. J., and Brittain, J. concurred.
