Durgin

This case presents the question whether a creditor suing on a written agreement guaranteeing payment of indebtedness at maturity and permitting the creditor to receive either cash or securities in settlement may exercise such choice for the first time on appeal from a judgment for defendant guarantor, after the creditor tried and lost its case in the trial court on the theory that the stock it had received in the debtor’s Chapter XI bankruptcy proceeding was worth less than the total amount of the claim.

In order to protect guarantors against being east involuntarily into the role of insurers against creditors’ losses from speculative holding of such stock for an indefinite period, we hold that Civil Code section 2822 1 requires, in case of bankruptcy proceedings, as in the instant situation, that creditors clearly exercise such cash-in-lieu-of-securities choices at the time of confirmation of the plan of arrangement or else be charged with acceptance of the stock received in bankruptcy. We further hold that sufficient evidence supported the jury’s finding that at the time of their receipt the securities *84 enjoyed a fair market value equal to the amount of the debt, thereby…