FNB Financial Co. v. Superior Court

I dissent.

As the majority correctly points out the 1939 amendment to Civil Code section 2787 abolished the distinction between sureties and guarantor. The state of the law is that the obligation of the guarantor is not independent of, but is identical with, the obligation of the principal debtor. (Wiener v. Van Winkle, 273 Cal.App.2d 774 [ 78 Cal.Rptr. 761 ]; American Guaranty Corp. v. Stoody, 230 Cal.App.2d 390 [ 41 Cal.Rptr. 69 ].) The contract in question cannot be read to be anything but a contract of guaranty of obligations which are themselves secured. The majority, in my opinion, does violence to the spirit of the law in finding a “separate” and “primary” unsecured obligation on the part of Kawai.

If I am correct in my view, Code of Civil Procedure section 483.010 is a complete answer to FNB’s contention. Subdivision (b) of that section expressly provides that an attachment may not be issued on a claim which is secured by any interest in real or personal property arising from agreement.

I would affirm the order of the trial court.

A petition for a rehearing was denied June 6, 1978, and the petition of the real party in interest for a hearing by the Supreme Court was…

Petitioner FNB Financial Company (Finance Company) brought an action for breach of contract against Kawai Piano *929 (America) Corporation (Kawai), and sought to attach Kawai’s inventory and business equipment. The trial court denied the attachment, concluding that because Finance Company was a secured creditor it had failed to establish its eligibility to attach. We issued an alternative writ of mandate.

Finance and Kawai were parties to a 1974 Floor Plan Financing Agreement (the Agreement), whose terms provided that on sales by Kawai of its pianos and organs to approved dealers, Finance Company would purchase from Kawai the resulting accounts receivable together with the purchase money security interests on the items sold. Kawai guaranteed payment of any defaulting account, and Kawai further agreed to repurchase the defaulting account from Finance Company on demand. On dealer default Kawai, “without notice or demand, shall become immediately liable to [Finance Company] for the full debit balance of the Dealer’s Advance Account of the Dealer in default, and the amount thereof shall be paid to FNB Financial forthwith by [Kawai] . .. The guarantee and liability of [Kawai]…