Defendant, a signer of a document that pertained to a loan made by plaintiff lender, appealed a judgment from the Superior Court of Sacramento County (California), which, after granting the lender’s motion for summary adjudication on the issue of whether the document was a guaranty, entered judgment for the lender in its action for breach of the guaranty.
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Overview
The signer executed a document entitled “Continuing Guaranty” that obligated him to pay an amount equal to the borrower’s debt, whether due or not due, upon the borrower’s default and the lender’s demand. He expressly waived antideficiency protections and other rights pursuant to Civ. Code, § 2856. The document stated that his obligations were not contingent upon and were independent of the borrower’s obligations. The real property securing the loan lost value and was worth less than the loan balance, resulting in a default that was not cured. The note was not paid when due. The court held that the document was a continuing guaranty as defined in Civ. Code, § 2814, and that the signer was a guarantor under Civ. Code, § 2787. Interpreted pursuant to Civ. Code, § 1639, and Code Civ. Proc., § 1858, to ascertain and declare the parties’ intent from the writing, the document showed no intent to create a demand note. Obligations not due were ordinarily included in a continuing guaranty. The lender’s demand triggered the signer’s obligation to pay after the borrower’s default. The independent nature of his obligations allowed the lender to enforce the guaranty against him personally.
Outcome
The court affirmed the judgment.