Hahn v. Walter

The question for decision is whether the court committed prejudicial error in awarding judgment to respondents upon the promissory note of appellant and, at the same time, including in the judgment a portion of the amount due on another note guaranteed by appellant in a contract of guaranty executed contemporaneously by'appellant, respondents and other parties. The appeal-is based upon the contentions (1) that the court arbitrarily refused to delay the trial until service might be made of appellant’s cross-complaint upon all of the eight signatories to the guaranty agreement, and - (2) that the court refused to order a transfer to the superior court of an action pending in the justice court brought by Henry D. Lyman, one of the guarantors against appellant and his wife.

On May 1, 1938, respondents received three promissory notes in the sums indicated and from the following parties, to wit: (1) H. D. Lyman, $2,130; (2) Fred L. Walter and Pearle Walter, $3,199.77; (3) Harrison Baker (and comakers), $3,129.08; all payable three years after date. Contemporaneously therewith the Walters and the Baker group delivered to Lyman their notes for $461.88, and $499.54 respectively, and the Bakers delivered to Walter their note for $499.54. The notes all contain the customary provisions for interest, for acceleration in event of nonpayment upon failure to pay an installment of interest, and for attorneys’ fees. However, each note contains a clause reciting that it is subject to the provisions of a guaranty agreement of even date by the same parties.

The guaranty agreement contained two separate guaranties: (1) a primary guaranty and (2) a secondary guaranty. By the former, appellant and Lyman each guaranteed the payment of one-fourth of the B'aker note. By the secondary guaranty appellant guaranteed the payment of one-third of the Lyman guaranty, that is to say, one-third of one-fourth of the Baker note. The Baker note was not paid. Neither did Lyman pay the amount of his guaranty thereof. Excepting certain set-offs the action went to trial with appellant indebted on his own note, on his one-fourth guaranty of the Baker note, and one-twelfth of the same note by reason of Lyman’s failure to pay his one-fourth of the Baker note. But respondents’ debt to appellant by reason of their guaranty of the Baker note was two-thirds of the $499.54, which respondent, by the secondary guaranty agreed to pay. Although

The court exercised a reasonable discretion in proceeding with the trial. So far as this action is concerned appellant and respondents were the only necessary parties. To the extent that the guaranty agreement affected the obligation of appellant he was the only necessary party defendant to the action. While under sections 379 et seq. of the Code of Civil Procedure respondents might have made the signatories to the guaranty agreement defendants in the action, they did not for that reason become necessary parties. Unless other unnamed persons are concerned with and are necessary to a determination of the issues as joined between the parties to the action such others are not necessary to a correct determination of the case. Whether under the circumstances here presented the court might allow separate trials between the obligees and the several obligors was a matter of discretion. (Caldwell v. Regents of University of California, 35 Cal.App. 639 [ 170 P. 666 ].) None of the other guarantors were concerned with appellant’s payment of his debt to respondents. Their only interest was in his nonpayment. The only agreements between respondents and appellant with respect to the latter’s obligations, are those contained in the promissory note and in the guaranty agreement. Judgment was awarded on

The action in the justice court by Lyman against the Walters was a separate action the presence of which in the superior court could not on any hypothesis affect appellant’s debt to respondents. It was based upon the promissory note executed by appellant in favor of Lyman. Respondents’ obligation thereon, as shown above, was duly credited to appellant in the judgment of the superior court now before us.

Appellant’s assignment that he was rushed into a trial of the cause comes with poor grace. He filed his cross-complaint on October 2nd and the ease was not tried until twenty days later. Had he deemed the presence of his cross-defendants necessary to a proper determination of the action he had ample time within which to bring them into court by service of summons or to gain the benefit of their testimony by subpoena. They all resided in Pasadena where the case was tried. In support of his contention that the court committed prejudicial error in trying the case without service on, or the appearance of, his cross-defendants, appellant has cited a number of authorities (Zirker v. Hughes, 77 Cal. 235 [ 19 P. 423 ] ; Abbott v. ’76 Land & Water Co., 161 Cal. 42 , 43 [ 118 P. 425 ]; Greenlee v. Los Angeles Trust & Savings Bank, 171 Cal. 371 [ 153 P. 383 ]; Lewis v. Hayes, 177 Cal. 587 [ 171 P. 293 ]; McPherson v. Parker, 30 Cal. 455 , 456 [ 89 Am.Dec. 129 ]; O’Connor v. Irvine, 74 Cal. 435 [ 16 P. 236 ]; Solomon v. Redona, 52 Cal.App. 300 [ 198 P. 643 ]) involving split demands, partnerships, accounting, titles, or other causes in equity necessitating the appearance of other unnamed though

The judgment is affirmed.

Wood (W. J.), J., and McComb., J., concurred.

Appellant’s petition for a hearing by the Supreme Court was denied December 6, 1943. Carter, J., and Schauer, J., voted for a hearing.