Shyvers v. Mitchell

Citation284 P.2d 826,133 Cal.App.2d 569
CourtCalifornia Court of Appeals
Decision Date13 June 1955
PartiesWilliam SHYVERS, Plaintiff and Appellant, v. Edward J. MITCHELL and E. Chester Robinson, Defendants, E. Chester Robinson, Respondent. Civ. 8494.

Edmund J. Dunning, Richmond, for appellant.

Zeff & Halley, Modesto, Breed, Robinson & Stewart, Oakland, for respondent.

SCHOTTKY, Justice.

This is an appeal from a judgment entered in favor of the respondent in an action to recover upon a continuing guaranty whereby respondent agreed to pay all past and future indebtedness of one E. J. Mitchell to the First National Bank in Richmond, the predecessor in interest of the appellant herein.

Respondent admits that he executed the written agreement on June 6, 1949, to secure a promissory note of even date of E. J. Mitchell in the principal amount of $3,500 and payable to the First National Bank in Richmond. He testified that he did so in order to enable Mr. Mitchell, a lifelong friend, to procure $1,000 which he needed immediately to prevent threatened criminal prosecution for issuing a $1,000 check which had been dishonored. However, at the suggestion of Mr. Partridge, the then president of the payee bank, the note was made in the larger amount in order to discharge three outstanding notes of smaller amounts and thereby consolidate Mr. Mitchell's total indebtedness into one written obligation due the bank. The note of June 6, 1949, was renewed by the execution on December 15, 1949, by Mr. Mitchell of a new note in like amount, but respondent does not claim to have been released from liability because of such extension of time. It is his contention that the guaranty was void because its execution was induced by the fraudulent representations of Mr. Partridge that respondent would never be held liable thereunder, that his bank held ample security for the note, and that respondent's guaranty was needed solely for the purpose of satisfying the rules of the bank examiners.

Over appellant's objection, and subject to his motion to strike, respondent and Mr. Mitchell testified that Mr. Partridge, the president of the payee bank, told respondent that 'he wouldn't come back on' him and that if Mr. Mitchell didn't repay the loan, 'he would do it himself.'

The court, over appellant's objection, also permitted respondent to testify that at the time of the transaction Mr. Partridge told him that the bank 'had security' of Mr. Mitchell's one-half interest in certain real property which was worth about $15,000. In this respect, Mr. Mitchell testified that he and his wife then owned said realty as joint owners but that he was restrained from disposing of, or hypothecating, his interest therein by a court order issued in his wife's pending divorce action. He further testified that Mr. Partridge told respondent that he 'certainly would get half of it, and that would be sufficient to liquidate a $3,500 note, which had I received it, I would have done.' However, Mr. Mitchell permitted a default judgment to be taken against him and the whole of the property was awarded to his wife.

Respondent also testified, over appellant's objection, that Mr. Partridge told him that the First National Bank of Richmond, appellant's assignor, held as security for any and all obligations of Edward J. Mitchell then owing or which might become owing to said First National Bank in Richmond the legal title to a 1947 Convertible Buick automobile, having a value of approximately $2,000. The fact was that the payee bank did not have this pink slip but it was in the hands of another bank of which Mr. Partridge was an officer and to which Mitchell was also indebted. The trial court found that these representations of Partridge, as president of said bank, were false and fraudulent and were made without any intention on the part of said Partridge to perform them and that respondent executed the guaranty relying on said representations, and that no valid contract of guaranty was ever entered into.

Respondent also testified that before signing the guaranty he insisted upon discussing it with Sherrill Halbert, then District Attorney of Stanislaus County, and at the time of the trial Superior Judge of said county. The reason respondent assigned for this was that he 'wanted to be sure that the representations made to me were correct.' Respondent did not testify as to what advice Judge Halbert tendered.

At the conclusion of first day of the trial a stipulation was entered into between counsel for respondent and Mr. Milich, the then counsel for appellant, that a written statement of Judge Halbert would be prepared and would then be admitted in evidence. A recess was taken and when the court reconvened a little over three months later appellant was represented by different counsel who objected to the introduction of Judge Halbert's statement, but the court admitted it, stating that it had been so stipulated. Judge Halbert's statement was to the effect that respondent told him that Mr. Partridge said he would not be held liable on the guaranty as the bank held more than sufficient security to assure payment of Mr. Mitchell's note. Judge Halbert stated that he pointed out that such representations were not contained in the guaranty and that if respondent signed it, 'he had better be prepared to pay the full amount of the loan in case Mr. Mitchell did not pay it.' Despite such forewarning, respondent executed the agreement.

In arguing for a reversal of the judgment appellant makes three major contentions: (1) The court erred in admitting parol evidence to vary the terms of the written contract of guaranty; (2) the court erred in admitting the written statement of Judge Sherrill Halbert; and (3) the evidence was insufficient to establish fraud on the part of appellant's assignor.

Appellant relies upon and cites section 1856 of the Code of Civil Procedure which reads as follows:

'When the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be between the parties and their representatives, or successors in interest, no evidence of the terms of the agreement other than the contents of the writing, except in the following cases:

'1. Where a mistake or imperfection of the writing is put in issue by the pleadings;

'2. Where the validity of the agreement is the fact in dispute.

'But this section does not exclude other evidence of the circumstances under which the agreement was made or to which it relates, as defined in section 1860, or to explain an extrinsic ambiguity, or to establish illegality or fraud. The term agreement includes deeds and wills, as well as contracts between parties.'

Appellant argues that the court erred in admitting evidence of the statements of Mr. Partridge that respondent would not be expected to pay the note and that if Mitchell didn't pay the loan he (Partridge) would pay it himself.

He states that the instant case is quite similar to Bank of America National Trust and Savings Association v. Pendergrass, 4 Cal.2d 258, 48 P.2d 659, wherein an attempt was made to contradict a specific provision in a written contract--an unconditional promise to pay money contained in a promissory note and mortgage--by pleading, as fraud, a promise, allegedly made without intention to perform, that no payment would be exacted during a particular year. In that case the court held that the defense was not available because it was a direct contradiction of the unconditional promise in the writing to pay the money on demand, and stated, 4 Cal.2d at page 263, 48 P.2d at page 661:

'This promise is in direct contravention of the unconditional promise contained in the note to pay the money on demand. The question then is: Is such a promise the subject of parol proof for the purpose of establishing fraud as a defense to the action or by way of cancelling the note, assuming, of course, that it can be properly coupled with proof that it...

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16 cases
  • Pinnacle Peak Developers v. TRW Inv. Corp., 1
    • United States
    • Court of Appeals of Arizona
    • October 28, 1980
    ...upon to support a finding of fraud, for to allow otherwise would do violence to the parol evidence rule. Shyvers v. Mitchell, 133 Cal.App.2d 569, 284 P.2d 826, 830 (1955). 3 Ariz.App. at 359-60, 414 P.2d at Division 2 of the Court of Appeals in Apolito and Sun Lodge appears to have adopted ......
  • Coast Bank v. Holmes
    • United States
    • California Court of Appeals
    • August 24, 1971
    ...258, 263, 48 P.2d 659; Bank of America v. Lamb Finance Co., Inc., Supra, 179 Cal.App.2d 498, 503, 3 Cal.Rptr. 877; Shyvers v. Mitchell, 133 Cal.App.2d 569, 573, 284 P.2d 826; Cobbs v. Cobbs, 53 Cal.App.2d 780, 128 P.2d 373.) But a false promise which is independent of or consistent with mat......
  • Rosener v. Sears, Roebuck & Co.
    • United States
    • California Court of Appeals
    • September 30, 1980
    ...performing it constitutes actionable fraud. (Fowler v. Fowler (1964) 227 Cal.App.2d 741, 748, 39 Cal.Rptr. 101; Shyvers v. Mitchell (1955) 133 Cal.App.2d 569, 574, 284 P.2d 826.) " . . . it has been repeatedly stated that '(w)ithout the consideration of other evidence, subsequent failure to......
  • Pacific State Bank v. Greene
    • United States
    • California Court of Appeals
    • July 10, 2003
    ...of the [promissory fraud] rule is clear, particularly in promissory note cases, and controlling here is Shyvers v. Mitchell [ (1955) ] 133 Cal.App.2d 569, 284 P.2d 826, in which a like contention was made that a guarantee on a note was void because its execution was induced by the fraudulen......
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