Bridges

The instant controversy had its genesis in the purchase of certain equipment for a drive-in restaurant leased in April of 1963 by defendant and cross-defendant Time Oil Company (referred to hereinafter as “Time”) to Jo An and Hershel Maggard. By clause “D” of the lease, it was agreed that all improvements and fixtures would belong absor lutely to the landlord (Time) upon termination of the lease for breach of any of the covenants contained therein; further, it was expressly provided that default in any contract for the payment of fixtures or equipment would be deemed a breach of the lease itself. The Maggards undertook to purchase the equipment from Krick’s Metal Works, a corporation, 50 percent of whose stock was owned by plaintiff and cross-defendant Bridges, its vice president. Upon making an investigation, the company’s president (Mr. Krick) found Maggards’ credit to be unsatisfactory, thus he negotiated with defendant and cross-complainant Cal-Pacific Leasing Company (“Cal-Pacific”) to finance the sale, culminating in a “Lease” of the equipment which was guaranteed in writing by both Bridges and Krick. Thereunder the Maggards became obligated to make 60 monthly…