Guild Wineries & Distilleries v. Land Dynamics

Guild Wineries and Distilleries appeals from a judgment for respondent Land Dynamics in this action brought by appellant to enforce respondent’s obligations as the surety on a continuing guaranty.

In November 1972, appellant granted to respondent an option to purchase for $875,000 a business entity called the Kingsburg Winery, comprising real and personal property. The option was assignable, but the agreement provided that upon assignment respondent would become liable under a continuing guaranty, in favor of appellant, of the assignee’s performance.

Early in 1973 respondent, with appellant’s consent, assigned its rights as optionee to Lamb-Weston, a division of AMFAC Corporation. Lamb-Weston was required by law to obtain a winegrower’s license from the Department of Alcoholic Beverage Control before it could operate the Kingsburg Winery; but another division of AMFAC already held a retail license, and at that time one entity could not lawfully hold both a winegrowing and a retail license. (Bus. & Prof. Code, § 25500 et seq.) Appellant, with knowledge of this disability, sold the winery to Lamb-Weston. Part of the purchase price was reflected by a $725,000 promissory…