Beverly Hills Nat. Bank v. Glynn

• Decision Date: 04 December 1968
• Citation: 73 Cal.Rptr. 808,267 Cal.App.2d 859
• Court: California Court of Appeals Court of Appeals
• Parties: BEVERLY HILLS NATIONAL BANK, Plaintiff, Respondent, and Appellant, v. John D. GLYNN, Defendant, Appellant, and Respondent. Civ. 31638.

Page 808

73 Cal.Rptr. 808

267 Cal.App.2d 859

BEVERLY HILLS NATIONAL BANK, Plaintiff, Respondent, and Appellant, v. John D. GLYNN, Defendant, Appellant, and Respondent.

Civ. 31638.

Court of Appeal, Second District, Division 4, California.

Dec. 4, 1968.

Rehearing Denied Dec. 26 and 31, 1968.

Hearing Denied Feb. 26, 1969.

[267 Cal.App.2d 862] John D. Glynn, in pro. per.

Loeb & Loeb, Jerome L. Goldberg, Albert F. Smith and Leon R. Shearer, Los Angeles, for plaintiff, respondent, and appellant, Beverly Hills National Bank.

KINGSLEY, Associate Justice.

John D. Glynn, defendant below, a practicing attorney who appears in this court as his own counsel, has appealed from the judgment. The trial court held Glynn liable on two promissory notes of which he was found to be the maker, refusing to find that Glynn was in reality a surety, and on a continuing guaranty for a certain loan made to James R. O'Toole. The court refused to find Glynn liable under the same continuing guaranty for two other loans made by the same borrower (O'Toole) and the bank appeals from that portion of the court's judgment denying recovery on two causes of action relating to these two loans.

Glynn, an attorney in practice for ten years, had numerous dealings during his practice with banks in which he had acted as guarantor, maker on notes, accommodation maker and pledgor.

James O'Toole, the borrower in the instant case, met Glynn in 1957. Glynn prepared wills for O'Toole and his wife. O'Toole referred tax matters to Glynn, who obtained an accountant to prepare O'Toole's tax returns. Glynn obtained a horse racing license for O'Toole and he filed a fictitious name business certificate for O'Toole.

William J. Marshall, assistant vice president of the Beverly Hills National Bank, met O'Toole in 1961 or 1962, while Marshall was branch manager of a different bank. O'Toole transferred his banking business to Beverly Hills National Bank when Marshall became loan officer of that bank.

O'Toole, who was engaged in horse racing ventures, was in debt for unpaid loans from other banks and also indebted to an individual, Ida Kaufman, for $10,000. O'Toole obtained two loans from Beverly Hills National Bank in 1963; he required additional funds and was told by Marshall that the bank could not lend him any more money unless he got someone else's continuing guaranty. No particular guarantor was mentioned by Mr. Marshall, and it was O'Toole's idea to ask Glynn to act as guarantor.

O'Toole visited Glynn's office and O'Toole told Glynn that the bank would not loan him any money without a guarantor. At this meeting Glynn left the impression with O'Toole that Glynn would act as O'Tooles guarantor, but that he wanted to speak to Mr. Marshall about it. On the same day Glynn spoke to Marshall on the telephone, although Glynn could not remember which of the events occurred first.

On February 12, 1963, Glynn, O'Toole and Marshall met at the bank. A financial statement of O'Toole, dated January 18, 1963, was on Marshall's desk, but Marshall did not recall showing it to Glynn. Glynn testified that he thought he looked at the financial statement, but that he didn't go into any detail about it. At this meeting, Glynn said he would think about the proposed deal. On February 13, the day after the meeting, the bank loaned O'Toole $3,500, evidenced by O'Toole's promissory note. The bank had previously loaned O'Toole $3,500 on February 1st. Glynn executed a continuing guaranty which bore the date of February 13, 1963, which guaranteed 'all sums of money which the bank heretofore has advanced or loaned or hereafter advances or lends' to O'Toole. Glynn was not sure whether or not the continuing guaranty was actually signed on the day recited in the instrument, February 13, and O'Toole and Marshall were not sure of the date either. Glynn said he thought the instrument was signed on February 14th or 15th, or the 25th. Glynn said he never inserted a date in the guaranty, nor was any already Paragraph 17 of the guaranty provides that the guaranty is in force until revoked in writing. Glynn testified that O'Toole stated that Marshall said the guaranty would not be used and would be destroyed, but Marshall's testimony was to the contrary and Marshall testified that the guaranty still stood.

in but that a $20,000 limitation of liability was typed in at his office. Glynn didn't read the guaranty but he knew what a guaranty was.

In addition to loans made by the bank directly to O'Toole, at least three loans were made by Glynn to O'Toole. One of them is not herein involved; the other two were made by Glynn after he had borrowed money from the bank on February 26th and March 1st, 1963, each loan being evidenced by Glynn's own promissory note payable to the bank. It is Glynn's contention that, as to these two notes, he was actually only a surety and not the principal; in support of that contention, he sought to introduce evidence that, after receiving the proceeds of the notes from the bank he used those funds to make the loans to O'Toole. The proffered evidence was excluded and judgment was entered in favor of the bank on those two notes.

The final transaction which took place in the instant case was a loan of $1,900 to O'Toole on April 22, 1963, evidenced by a promissory note executed by O'Toole.

A summary of the loans is as follows:

                                                                Plaintiff's
                   Date  Maker of   Face   Unpaid  Plaintiff's   Cause of
                   1963    Note    Amount  Amount    Exhibit      Action
                -------  --------  ------  ------  -----------  -----------
                Feb. 1   O'Toole   $3,500  $2,000       3          Third
                Feb. 13  O'Toole    3,500   3,000       4         Fourth
                Feb. 26   Glynn     5,000   5,000       1          First
                Mar. 1    Glynn     3,000   3,000       2         Second
                Apr. 22  O'Toole    1,900   1,900       5          Fifth
                

There is evidence that the bank did not come forward with detailed information as to O'Toole's financial condition although Mr. Glynn knew that O'Toole owed the bank money. Also there is no indication that Mr. Glynn asked for that information from the bank.

Glynn, the appellant herein, testified that it was Mr. Marshall who asked him to act as guarantor. Glynn also asserts that, at the February 12th meeting, Marshall did not disclose that O'Toole had substantial obligations to Citizens National Bank, to Ida Kaufman, and to the Bank of America, nor did the bank disclose that a number of Mr. O'Toole's horses were incapable of being entered into various races for which they were eligible, nor did Marshall disclose other important financial information.

At the conclusion of the trial the court held that, as to the O'Toole notes of February 1 and 13, 1963, defendant Glynn had no liability as there was no consideration for notes executed prior to the time of the signing of the continuing guaranty; as to the O'Toole note dated April 22, 1963, being a partial renewal of an earlier note dated January 18, 1963, the court held defendant Glynn liable, finding consideration by the bank's forbearance on the original note by its partial renewal. The court found that defendant Glynn was a maker and not ostensible surety on the February 26 and March 1 notes, holding Glynn liable thereon. The court awarded $2,250 attorney fees plus costs to the plaintiff bank.

The judgment in favor of the bank was based on the court's finding that O'Toole, and not the bank, had secured Glynn as Both parties appeal and the bank limits its appeal to that portion of the judgment adverse to it, which dealt with the February 1st and February 13th notes.

guarantor, that the bank's conduct was not fraudulent or misleading, that Glynn had not relied on O'Toole's financial statement in the bank's possession, and that Glynn's personal notes were signed in the capacity of maker and not surety.

I

Glynn requests that the court dismiss the bank's separate appeal on the ground that the bank forfeited its right to appeal by accepting the benefits of a portion of the judgment in its favor. However, when a judgment contains distinct and severable provisions on independent issues or causes of action, and a reversal on one will not disturb the determination of others, it is proper to accept the benefits of the determination on one issue and appeal from another severable portion of the judgment. (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 214--215, 259 P.2d 656; Hansen v. Hansen (1965) 233 Cal.App.2d 575, 43 Cal.Rptr. 729.) A party is not precluded form appealing where the portion of the judgment appealed from is not so interwoven with other provisions as to prevent an independent examination of the part challenged, and the matters or issues embraced in the challenged part are not the same as, or interdependent on, issues not attacked. (American Enterprise, Inc. v. Van Winkle (1952) 39 Cal.2d 210, 217, 246 P.2d 935.) Since the bank in the instant case limited its appeal to its third and fourth causes of action, which dealt with the February 1st and 13th notes, and since an independent examination of these issues is possible, the bank's appeal is not dismissed. ¹

II

Defendant Glynn asserts that the court erred in not finding that the bank failed in its duty to disclose to him facts relating to O'Toole's financial condition. The court found that the bank owed Glynn no duty of disclosure. Glynn cites in his brief numerous cases and text book excerpts setting forth the duty of disclosure of a creditor to a surety. However, the duty of the creditor in the case where the surety is obtained by the debtor (as in the case before us) is different from the duty of the creditor, when it is the creditor who obtains the surety. Where the guarantor or surety comes forward at the request of the debtor, there is no duty of disclosure on the part of the creditor; the creditor merely has to fully and fairly answer questions put to him and conceal nothing which he himself believes might influence the...