Fansler

Because appellant, United States of America, on behalf of the Small Business Administration, very narrowly limits the issue it requests us to consider, we need not recite the facts of the lawsuit in detail. Appellant frames the issue as follows: “The respondents sought to enforce an equitable lien. The lower court committed reversible error by failing to investigate whether they were entitled to equitable relief when facts suggesting otherwise were brought to its attention.”

Statement of Facts and Proceedings

In November 1985 respondents 1 and defendant, David P. Fansler (David), settled an ongoing dispute, the terms of which provided, inter alia, that *83 Paul guaranteed two separate loans in favor of the Fresno Bank of Commerce in the amount of $125,000 each. The guaranty on one of the loans was to be secured by a deed of trust on David’s 3 percent interest in the Cedar Commons apartment complex, a partnership in which David was a limited partner.

By July 1987 David had defaulted on his obligation to the bank, and Paul was required to pay $12,908.66 pursuant to his guaranty. Respondents filed suit against David, seeking (1) $12,908.66 for monies paid out, (2)…