Appellant creditor challenged an order of the Superior Court of Los Angeles County (California), which sustained the demurrer that respondent guarantors filed in the creditor’s action, in which he sought to enforce the guaranty that the guarantors executed and dismissed the action.
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Overview
The trial court sustained the demurrer that the guarantors filed in the creditor’s action to enforce the guaranty that the guarantors executed as to the creditor’s real estate sales contract with the debtor, on which the debtor failed to meet his obligations, and dismissed the action as to the guarantors. The court affirmed that dismissal on appeal. The court reasoned that the guaranty’s terms limited the guarantors’ liability, which could not have exceeded the debtor’s obligation. The court also held that the creditor’s recission of his contract with the debtor terminated the guarantors’ obligations to him and that the creditor’s right of action against the debtor for the damages that arose from the breach of the sales contract was entirely independent of his right of action on the note. The court further concluded that the creditor did not show a cause of action against the guarantors because they did not guarantee any liability of the debtor for breach of contract damages.
Outcome
The court affirmed a judgment that sustained the guarantors’ demurrer in the creditor’s action and that dismissed the creditor’s claim against the guarantors.
